Company profile for the media company HBO (Home Box Office) - Term Paper Example

xxxx Journalism, Mass Media and Communication Topic:  Company profile for the media company "HBO" (Home Box Office) 11 November, 2011 Home Box Office Home Box Office (HBO) is one of the leading and most widely distributed premium cable television networks of United States of America. After Ecnore, it is the nation’s leading television channel. The channel is expanding its broadcast continuously by licensing its broadcast to television networks and presently people of about 151 countries around the world are enjoying its original programs. At the same time, HBO’s branded premium pay and basic cable networks are operating in about 50 countries of Latin America, Central and Western Europe, and some parts of Asia as well (http://www.timewarner.com). At the end of 2011, it had about 81 million global subscribers out of which 42.5 million are international premium pay and basic cable subscriber while rest of 39.4 million are nationwide premium pay subscriber. HBO is available in HD on number of multiplex channels like Direct TV, Cox Communication, Xfinity, Time Warner Cable, and Dish Network etc. The year 2011 is the fourth consecutive year when HBO has won 4 Golden Globes award more than any network while it has been the 10th consecutive year when it has won 8 Sports Emmys and 19 Primetime Emmys in 2011 (HBO Annual Report, 2010). Strangers No More, a documentary film of HBO received Academy Award for the category of Best Documentary. 1. What do they do in media? HBO mainly operates television films, comedy shows and concerts, motion pictures and original series, and occasionally boxing matches via cable, direct broadcast satellite (DBS), C-band satellite, and microwave (MMDS). The network has offered HBO On Demand. It means HBO has given a wonderful option to its subscriber to watch its programs according to their own schedule. A big share of HBO’s programs consists of egalitarian theatrical motion pictures. For this purpose, HBO acquires license agreements from the producers or distributors of such recently released films. Under such agreements, HBO gets exclusive rights to broadcast and distribute recently released or old films. The license agreement always depends on the performance of films on the box office. High-quality award winning original comedy and theatrical series is another broadcast segment of HBO e.g., Boardwalk Empire, Curb Your Enthusiasm, True Blood, and Boardwalk Empire. Besides these, HBO also shows boxing matches, family programs, sports news, and commentaries. 2. How long has this business been in operation, what is their history? Charles Dolan, one of the pioneers of cable networks systems in United States of America, presented the business plan of ‘Green Channel’ to Time Life Inc. On 8 November, 1972 the channel became Home Box Office or HBO (Forsyth, 2002). ‘Sometimes a Great Notion’ was the first ever program aired on HBO. In 1973, Time Life Inc took over the control of newly established channel as Gerald Levin became the first President as well as CEO of HBO. Initially churn rate from subscribers was so high. HBO was tumbling and any debacle could have been occurred. At that time, Levin introduced the broadcasting in Massachusetts. Here a preview of service was offered for free on Channel 3. This offer showed promising results as HBO gained a good number of subscribers. Later on the same strategy was applied in other states. On 30th September 1975, HBO put on air the first ever live boxing match between Muhammad Ali and Joe Frazier and thus became the first television channel which delivered the telecast through satellite medium (http://transition.fcc.gov). HBO launched its companion network Cinemax in 1980 which is still very popular and known for its late night soft-core adult shows and series. In 1981, HBO extended its broadcast from 09 hours to 24 hours. In 1983, HBO presented its first kids’ show. Until 2001, HBO showed number of programs for children when these programs were shifted entirely to HBO Family channel. The decade of 80s observed several legal issues with HBO. HBO became part of Time Warner in 1989 due to merging of Time Inc with Warner Communication. In 1991, Cinemax and HBO became the pioneer of premium services when they jointly offered multiplexing to their customers. By the successful launching of HBO2 and Cinemax2 in 1991, both channels enabled to progress further. Within a span of few years, HBO launched HBO Family, HBO Zone, HBO Comedy, and HBO Latino. Cinemax3 and ThrillerMax were also launched. HBO became the first network television which presented digital television service in 1995 (Lesly, 1997). HBO showed a magnificent performance on television industry over the years. Its track record is matchless as it had won number of awards, more than any other network. The channel is has been winning Sports Emmys and Primetime Emmys awards for the last ten consecutive years while Golden Globes award for the last four consecutive years. Number of its original movies won Academy Awards. There is a huge list of its original programs which got worldwide appreciation. 3. Are they a division of a larger company/ have subdivisions and/or what are these company’s holdings? HBO is not an independent network rather it is a subsidiary of Time Warner Entertainment Co., 63% of which is owned by Time Warner Inc (http://www.fundinguniverse.com). Currently HBO’s 7 channels are broadcasting a variety of programs. (a) HBO. The flagship service is HBO itself which is popular for it features films, original movies and series, comedy shows, sports news and boxing matches. This channel also telecast new movies on Saturday nights. (b) HBO Comedy. Second channel is HBO Comedy which is associated with comedy or less serious movies and series. It also rebroadcast HBO original films and series as well as R-rated films during day and adult comedy specials at night. (c) HBO Family. It airs family related movies specially emphasizing on youngsters. This channel does not present R-rated movies rather it shows G, PG. PG-13 rated films. (d) HBO Latino. This is a Spanish language version of HBO which airs HBO original as well Hollywood epic hit movies in Spanish language. It also shows boxing events e.g. shows Boxeo De Oro. (e) HBO Zone. The target market of this channel is the group of people ageing between 18 to 35 years. It shows programs for adult s at night. (f) HBO 2. It shows more films, movies, and series plus R-rated films. (g) HBO3 or HBO Signature. This channel mainly shows female oriented programs which includes HBO original movies and specials 4. If electronic media is new for this company, how/why did they become involved? HBO is not new entrant in electronic field as it is in this business for the last 37 years. In 1965, Charles Dolan won franchise to start up its business of cable network in New York. The network was the American first underground system. In that very year, Time Life Inc got 20% shares of this network system. It shows that when on 08 November 1972, HBO was founded, it had a background of electronic field and the employees had some seven years of experience in cable network industry. 5. How has the current state of the economy affected this company? HBO is not away from the adverse effects of recent global recession. Due to current weak economic conditions, the broadcasting business of the company have been affected badly and likely to be affected in future as well. Unemployment rate, decreasing confidence of customer, consumer schedules, and interest rates are the main factors responsible for this turndown. Since HBO’s most programs are largely unrestricted, therefore any downfall in either U.S. economy or international markets reduces the demands of its programs by international subscribers and thus causes a decline in its revenue. Further, the marketing expenditures are always cyclic in nature and thus be a sign of the general financial situation. Therefore like other networks, HBO has to spend an extensive amount of its earnings for the advertising of its products, movies, shows, programs etc. As a result of feeble cost-effective conditions, a turn down in customer’s expenditure could also affect the HBO’s advertising returns in a roundabout way by forming up a pressure on publicity as advertisers may not identify the exact value of marketing if customers buy their services. HBO has got an adverse effect due to the impact of market and economic conditions on third parties like producers, distributors, insurers, and the agencies related to this business. The down turn of these parties has reduced the number of outlets for the HBO’s original DVDs, Blu-ray Discs, and distribution of magazines and thus affected the overall revenue of HBO. Similarly since HBO is basically a part of showbiz world and this field has a broad horizon in terms of its activities. Therefore, in a broader sense, HBO is also related to fashions, style, sports events, traveling, advertising, commercial activities etc. the output of all these related outlets depend on political regulations, technological advancements, social norms, and of course the economical factors. Any of significant changes, which modify the current status of any facet of these factors, also obstruct either the future performance of HBO or its current ability to maintain its revenue generating rate. This is a permanent risk factor for HBO. 6. What technology changes have they experienced or caused? Showbiz and cable network industry is highly dependent on technological developments. During recent years, HBO has enjoyed its leading performance by introducing number of latest technological innovations in its field of operations. HBO has got valuable advantages by distributing its contents through various hi-tech means and thus earned a big share of market capitalization by managing its original programs through various distributing channel. The availability of HBO’s online programming is the leading edge of the company for which the company has introduced HBO GO and MAX GO for its online broadcast. HBO’s products in HD are available on HBO On Demand and Cinemax On Demand. Along with different mobile platforms, HBO’s products are also distributed at global scale by various online stores or auction sites like eBay, Amazon.com, Apple Inc. and Sony PlayStation. Further, HBO has successfully launched an enhanced version of HBO.com, youtube channel, and iPhone and iPad apps. Lastly but not the least, the successful launching of HBO GO which is available on Apple’s iPhone, iPad, and iPad touch devices. Although HBO has attained several cutting edge benefits by using modern and up to date technology, however, it may also pose some challenges which may affect its earning and competitive standing. For example, electronic innovations have been changing the mind set of target market by providing them number of choices for their entertainment such as online stuff in the form of movies, TV series, live sports events, online phone and chatting services etc. These growing aggregators negatively affect the decision making of customers in terms of purchasing the best services. In turn, it may contribute to the decline in HBO’s revenue. 7. What market changes have they experienced or caused? The current market trends show a strong competition in the field of television network industry. Like other business fields, cable network industry has faced tremendous challenges of scientific innovations in recent past. The consumer behaviors have been found changing and it has become more oriented towards online resources. 8. How have these changed affected them? On the basis of expert analysis, it has been observed that cables HBO along with other cable network channels have faced some significant outcomes from current market trends. HBO and its rivalries have suffered a decline in advertising revenue. Internet advertising is mainly a leading contributing factor responsible for this decline. Due to this turndown, these TV channels have stated to approach cable companies to make the deficiency. Since cable companies are also dependent on these channels therefore they have been paying these channels a huge amount and eventually this in turn has built a burden on consumer side. Therefore, HBO and its competitors have faced a little decline in their account of cable subscribers. HBO however has experienced a healthy trend in the sale of its original DVDs and Blu-ray discs in recent times. 9. What is the target Demographic of the organization? Presently HBO is enjoying its market capitalization through more than 40 million subscribers in United States. With such a massive base of subscribers, HBO contains a community of diversified audience. Presently, the consumer market of HBO consists of 53% males and 47% females. Almost 60% audience comprised of ages from 18 to 49 out of which 38% belong to age group of 18 to 34 years while 32% are from 35 to 49 years. Internationally, 67% of the audience belongs to Caucasian and 18% from African American (http://www.slideshare.net). HBO has a competitive edge on its rivalries by keeping a huge share of college students in consumer market. Almost 72% of college students prefer to watch HBO as shown Appendix-I. Similarly 76% of hotel guest prefer to watch it as shown Appendix-II. (http://www.homeboxoffice.com). Under the campaign of ‘It’s Not T.V. It’s HBO’, HBO hopes to achieve each sector of the U.S. target market from ages 18 to 49. 10. Who/what is their primary competition? HBO established a strong brand identity by broadcasting original programs. At one stage consumer had no other option except to watch HBO. There was no challenging rivalry of HBO. However, TNT and Showtime followed the HBO’s strategy to show more original programs. This created a competitive environment. Later on number of other cable television networks entered in the market and therefore created a very competitive environment. Today the main competitors of HBO consist of Showtime, TNT, UTV Action, Star Movies, MGM, WB, and PIX. 11. How does the company compete with competitors and as a result, what is HBO’s market share? By the arrival of cable and online media, HBO observed that it could not fight the other TV channels. In sequence HBO formulated a strategy to catch the customers’ concentration. In a modern scenario where even a normal individual could pick number of options to watch television programs i.e. online options, cinemas or theatres, rent a movie from any nearby store, or pay for a movie or special shows, HBO projected image ads strategy to equate the entertainment programs of television. HBO hired BBDO for this project and almost $60 million were spent on this successful strategy. HBO put its best to air that kind of ads which were remained under discussions amongst its target market during days and nights. Nancy Parmet (1997), HBO Vice President of Marketing said "They were creative and innovative, most importantly, they were entertaining”. The successful campaign was launched in 1996 and it significantly contributed to grow the revenue of HBO. By the end of 1996, the HBO subscriber count reached 21.9 million which was 6.8% greater than of 1995. After making huge revenue through this strategy, the company enabled to launch number of channels like HBO Family, HBO Zone, HBO Latino and HBO Comedy within next few years. 12. Impact: How has this type of media impacted regarding: society in general, culture, attitudes, general knowledge, and consumption. Both mass and entertainment media are a tremendous source of information for general public. No doubt, the habits and attitude change or can be changed under the impact of media. The concept of change in society mean a positive change but practically the effect can be reversed as well. It means entertaining media such as HBO or any other television network can influence the society in terms of individual as well as collective change. Individually it can impact on the attitudes of community while with respect to collective contribution it changes the overall culture of a culture. Positive Impacts Valuable information and knowledge is delivered to the audience of HBO. With the contribution of movies, series, and especially through special shows HBO has improved the general education standard of its subscribers. Subscribers learn a lot about current and historical events and about those events they might not otherwise have been aware of. HBO has brought the people of the world closer to each other and have highlighted the cultures of different societies through its movies, series, and special shows. Although HBO has put negative influence on society as well, however, it all depends on the choice of subscriber that what he or she should go to watch according to his or her age group. Negative Impacts HBO movies and different programs however have a negative impact on society. The leading negative impact is that it adversely affects the traditional culture of a society. Similarly it promotes the desires in public to have such products which actually not necessary for them. HBO movies show some violence scenes in their original movies and series which put a really negative impression on children and school going students. R-rated movies and adult contents instigate the young generation for the desire of sex during pre adolescence. Conclusion HBO is the leading television channel offering a wide variety of programs through its state of the art technology and highly professional employees. Its over the years performance is the obvious evidence of its long time struggle through difficult times. In order to contest its rivalries, HBO must focus on innovative strategies which should be mainly associated with hi-tech technology. Mergers and acquisitions should not be a bad idea for HBO to cope up the financial crisis and global recession. Appendix-I Appendix-II Works Cited Forsyth, Kevin S. Delta, Satcom, and the Cable Boom. History of the Delta Launch Vehicle http://kevinforsyth.net/delta/satcom.htm. (2002). Retrieved 2008-06-03 Lesly, S. E. Call It Home Buzz Office, Business Week, December 8, 1997, pp. 77, 80. Read More