Sopranos Hooks HBO Viewers

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In March, Deb Tener and her husband, John, were staying at
a hotel in Memphis, Tenn., when they saw the first two episodes of The Sopranos.
She said she was "instantly smitten" with the show.

When the Teners got back home to Columbus, Ohio, they
immediately called Time Warner Cable and ordered a subscription to Home Box Office.

"It's worth every penny," said Deb, who works for
Ohio State University. "I can't wait until the new season [of The Sopranos]
begins."

HBO's original series, The Sopranos, is the tale of
a northern New Jersey mobster who is driven to see a psychiatrist due to stress from both
of his overlapping families: the Mafia and his actual relatives.

This year, the show -- a drama laced with comedy -- emerged
as a breakout hit that was a rarity of rarities: a series that was as popular with viewers
as it was with TV critics.

The Sopranos marks HBO's biggest success to date as it
expands its commitment to bring original series to its schedule.

The show's first 13 episodes will be repeated in order
starting in June, and the network has ordered another 13 shows, which start production
this summer, to begin airing in January.

Original series such as Oz and Sex in the City are
becoming more and more important to Time Warner Inc. unit HBO, helping the service to
address the two core challenges of premium TV: attracting new subscriptions and retaining
current ones.

In fact, Time Warner chairman Gerald Levin, discussing his
company's first-quarter results with reporters recently, said he expected The Sopranos to
boost HBO subscriptions.

HBO isn't the only premium service that has ramped up its
number of original series: Showtime has been just as aggressive.

Both pay services seem to have acknowledged that they need
more than just theatricals and made-for-TV movies to hold their own in the new digital-TV
landscape of more than 100 channels, which includes the very convenient option of
near-video-on-demand.

HBO is so pleased with the success of its original series
that on June 9, it will kick off its first full night of them, with a lineup of five shows
that starts at 8 p.m. and reruns of the first season of The Sopranos smack in the
middle at 9 p.m.

The Teners are a case study of The Sopranos'ability
to attract new subscribers to HBO. But officials at the service said they don't have any
hard data on the impact of the show as far as driving subscriptions.

"All we have is anecdotal, over-the-fence,
mother-in-law research that people who once had HBO got it back because of The Sopranos,"
said David Baldwin, HBO's senior vice president of programming planning

Nonetheless, MSOs such as Cox Communications Inc. and some
cable systems -- seeking to capitalize on the media coverage surrounding the show and to
make consumers an offer they can't refuse -- are including references to The Sopranos
in acquisition campaigns for HBO.

"If there is a buzz about this hot program, why not
try to sell it [in an acquisition campaign]?" asked David Goldberg, vice president of
marketing for Time Warner Cable of New York City. "We try to capitalize on the
success of the originals."

While HBO has no specific research on The Sopranos vis-à-viswhether or not it has boosted subscriptions,the company certainly believes as
a rule, original series can help them to keep current subscribers happy and to combat
churn.

"Series are good for retention," Baldwin said.
"They build regularity into a schedule … And at the end of the day, you get
satisfied usage."

That's the reason why HBO is inaugurating its Wednesday
primetime slate of original shows -- some new episodes and some replays. The lineup will
start at 8 p.m. with Arli$$, followed at 8:30 p.m. by Sex in the City,
repeats of The Sopranos at 9 p.m., Oz at 10 p.m. and animated series Spawn
at 11 p.m.

"We were looking to do a midweek play," Baldwin
said.

Showtime has already marked Friday as its own destination
night, starting at 10 p.m., for a slate of four original science-fiction shows. Like HBO,
Showtime believes in the power of original series.

"It's a way of developing continuing loyalty and
viewership," said Ann Foley, Showtime's executive vice president of East Coast
programming.

Chris Albrecht, president of HBO Original Programming, is
the architect of the network's successful foray into original series, and he can be
credited with bringing The Sopranos --which was rejected by several
broadcast networks -- to HBO.

There's a method to his madness of adding a host of new
original series to HBO -- a strategy that recently helped to win him a major promotion.

"Pay television is an increasingly competitive
environment," Albrecht said. "It's critical for us to become as successful in
the series arena as with our big movies and boxing …We realize that in the television
business, there is nothing historically or in the present environment that has as much
impact as a series. It has become part of the vernacular and culture of the times."

Referring to the importance of original series, Baldwin
added, "As good as theatricals are, they come to us after home-video and PPV
[pay-per-view] exposure. That's not going to change."

HBO had 23.7 million subscribers at the end of last year,
according to Paul Kagan Associates Inc., up from 22.9 million the prior year. But most of
that growth is coming from direct-broadcast satellite, and not cable, according to Kagan,
which put HBO's monthly churn rate at 3 percent to 5 percent.

In terms of attracting new HBO subscribers and getting
former ones back, cable operators have been using The Sopranos to their advantage.

Last month, Cox did a weekend-long, on-air premium drive
for HBO. Based at the MGM Grand in Las Vegas, the event was targeted at Cox's 4 million
subscribers. During the drive, Cox emphasized HBO's original programming, according to
Richard Yelen, the MSO's director of cable-TV marketing.

"And The Sopranos had the biggest play,"
he said, with Cox stressing that it was the kind of cutting-edge show that can't be found
on broadcast television.

"We don't do enough promotion of original
product," Yelen added. "We need to spend more time doing it … The
Sopranos
is like Ally McBeal.It has water-cooler buzz."

There are two other reasons why Cox is highlighting
originals such as The Sopranos in its HBO acquisition campaigns, Yelen said.

First of all, the primary targets for such campaigns are
ex-HBO subscribers, and they need to be updated about what the network is offering today,
according to Yelen.

"We want to differentiate premium services, and a key
potential target for us is former HBO subscribers," he said. "They are aware
that HBO has theatricals, but they may not be so aware of the new original programming.
We're trying to say this is a different product."

And the emphasis on HBO's original programming also helps
to distinguish the premium service from the NVOD PPV offerings that are part of Cox's
digital-TV package.

"We need to differentiate HBO from PPV," Yelen
said.

Cox considered its recent HBO acquisition drive a success,
as it generated 15,000 calls to an 800 number, according to Yelen.

In recent print-ad campaigns in New York, Time Warner has
been running still photos of The Sopranos and other original HBO series, asking,
"Do you want it all?" The ads point out HBO's channel slot in the Big Apple. The
goal of the campaign was to convince cable homes to upgrade to HBO and to attract noncable
homes to cable.

"We almost prefer to use the originals [in ads],
rather than the big theatrical blockbusters, like Titanic,"Goldberg
said. "It's a way of differentiating us from broadcast."

In addition to running ads in papers such as The New
York Times
, Time Warner also did a false cover on TV Guide with The Sopranos
that was sent to about 100,000 of the system's subscribers.

Baldwin said that unlike some of HBO's other original
series, The Sopranos has managed to appeal to all segments of the network's
audience: heavy TV users; very discriminating light TV users; a female cluster; urban
ethnic viewers; and young men 18 to 24, many of whom still live at home.

"This is the first time we've had anything that had
this kind of intensive response built on 13 episodes," Albrecht said. "We've
been able to do something that's distinctly a pay television franchise with The
Sopranos
."

For example, while TheLarry Sanders Show was
a cult hit and critics' darling, its ratings were relatively low on HBO.

In contrast, The Sopranos averaged an 8.3 rating in
HBO's universe for the debut airing of each episode, or 2.2 million households, during its
first run. And its finale episode in April did a 12.6 rating, or 3.6 million households.

HBO managed to get a nice plug for its service in at least
one TV critic's laudatory review of The Sopranos'season finale:Last
month, San Francisco Chronicle TV critic Tim Goodman,after calling The
Sopranos
"television's best show," poked fun at readers who weren't HBO
subscribers.

"What's the matter?" Goodman wrote. "You
don't get HBO? What are you, a Luddite? Do you have a toaster? How about an answering
machine? Pony up what little cash it takes to actually watch good television."

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