HBO (Home Box Office)

HBO, short for Home Box Office Inc., is an American cable television company that owns the premium channels HBO and Cinemax. Consumers must pay a subscription for these channels, which air a variety of new and old films, original television programs, sports events, concerts, and more. Time Warner Inc. owns Home Box Office Inc.

Origins

The HBO channel debuted in 1972 in Wilkes-Barre, Pennsylvania. At first, it focused on first-run movies, older films, and sports programming without commercials. Subscribers paid about $6 a month for the service, which was transmitted via microwave waves to local cable companies that distributed the channel to subscribers.

It took a few years for the channel to establish itself. The cable television industry faced tough federal regulations and restrictions because major television networks feared the competition. It also suffered from lack of infrastructure in many areas. By the mid-1970s, the cable industry expanded infrastructure into big cities such as New York and Boston, and the government lifted some restrictions. In 1977, restrictions related to the content of movies and sports available on cable television channels were lifted, which helped HBO establish itself in the market. The cable industry saw a huge increase in subscribers wanting HBO, and HBO began making a profit in 1977.

By the following year, HBO faced competition from the cable channel Showtime. Viacom, which owned Showtime, made a deal with the cable provider Teleprompter to carry Showtime. At the time, Teleprompter was the largest cable provider in the United States. This deal resulted in HBO losing thousands of customers to Showtime.

To compete, HBO worked on improving the types of programs it offered, focusing on popular films and stand-up comedy shows. In 1978, Time bought American Television & Communications Corp., which at the time was the second largest cable provider in the country, in hopes that the majority of its customers would subscribe to HBO. Additionally, Time was able to pay higher prices for films than its competitors and pay in advance for the rights to films. While it put HBO at an advantage, it angered film studios who feared HBO would drive them out of business and take control of the film industry. HBO introduced a second cable channel, Cinemax, in 1980. Cinemax had a lower subscription rate and was added to compete with Showtime.

Continued Rise

By 1982, HBO was three times the size of Showtime and had about 10 million subscribers. This allowed HBO to pay more for films and earn more money. It continued to make deals with film studios, allowing it to remain ahead of Showtime. At the end of the year, HBO worked with Columbia Pictures and CBS to create the film studio Tri-Star Pictures. HBO acquired the cable television rights for the new film company.

The following year, HBO was producing its own television movies and original programs. Its growth slowed in 1984 due to lack of infrastructure in major cities and rising cable rates. Additionally, more people owned VCRs and could rent films on video rather than watch them on HBO.

Showtime also began a new policy. It would show only exclusive films and refused to share rights. Because of this, Showtime was able to secure exclusive rights for many popular films, which increased the price for acquiring many films and forced HBO to negotiate for exclusive film rights. Despite this, HBO continued to best Showtime.

Showtime reacted in 1989 when its owner, Viacom, filed an antitrust lawsuit against HBO, alleging HBO was forcing cable providers to carry HBO instead of Showtime. The suit also alleged that HBO was trying to make exclusive deals to prevent Showtime from acquiring films. The suit was settled out of court in 1992.

Showtime and HBO both released competing comedy channels around this time. Neither proved popular. The two companies joined forces and merged the channels into Comedy Central, to the surprise of many.

During the early 1990s, cable channels saw a decline. Subscribers complained that the channels showed the same films. To fix this, both HBO and Cinemax began to offer multiple channels that aired different types of programming that catered to groups such as families or Spanish-speakers. However, at the time, many cable providers did not have the technology to offer these additional channels. Eventually, fiber-optic lines were installed in more locations, allowing more subscribers access to the additional channels.

The decline continued, and HBO began to look into other ventures. It acquired foreign and sports programs. It also focused on producing original programming. This tactic worked, and HBO became known for shows such as The Larry Sanders Show and Oz. HBO remained on top through the end of the 1990s, even as new cable channels such as Starz debuted. Its programs won major awards, including Emmys and Golden Globes. However, HBO faced more competition with the introduction of the satellite market.

Into the 2000s

HBO continued to focus on original programming into the new millennium with popular shows such as The Sopranos, Sex and the City, The Wire, and Band of Brothers. Meanwhile, Time Warner merged with AOL. HBO continued to grow, and its programs collected many more awards. The film portion of the company produced numerous original films. Throughout the 2000s, HBO paired with cable and noncable channels such as A&E and Public Broadcasting Service (PBS) to broadcast HBO series and films.

By the 2010s, HBO was known for its various award-winning original programs such as Game of Thrones, Girls, Boardwalk Empire, and VEEP. It competed with new technology with the introduction of the Internet-streaming service HBO Go and the subscription video-on-demand (VoD) product HBO on Demand.

In 2015, HBO released the stand-alone streaming service HBO Now. While HBO Go was available to only HBO subscribers, HBO Now was available to people who wanted access to HBO programming but did not want to subscribe to a cable provider. HBO Now could be streamed on devices such as smartphones and tablets and through digital media players such as Google Chromecast and Roku.

In 2016, HBO went through another change as Time Warner, HBO's parent company, was bought by AT&T for $85.4 million. The deal took almost two years to be completed. The company became Warner Media and looked to create a new streaming service to compete with Netflix. As such, HBO Max was created, combining Warner Media and HBO's extensive film and TV catalog. The service was rebranded Max. In 2023, the service had 54 million US subscribers. While impressive, the number was still 20 million below Netflix, the company Max was created to compete with. That same year Max had more subscribers than Hulu, Disney+, and Paramount+.

Bibliography

Curry, David. "Max Revenue and Usage Statistics (2025)." Business of Apps, 22 Jan. 2025, www.businessofapps.com/data/hbo-max-statistics/. Accessed 27 Jan. 2025. 

Geddes, James. "HBO Go vs. HBO Now: What's the Difference between HBO's Two Streaming Services?" Tech Times. Tech Times. 16 Mar. 2015. Web. 27 Jan. 2025. www.techtimes.com/articles/40124/20150316/hbo-go-vs-hbo-now-what-s-the-difference-between-hbo-s-two-streaming-services.htm.

Geeter, Darren. "How HBO Survived Mergers and Strategy Shifts to Dominate Prestige TV." CNBC, 23 Apr. 2023, www.cnbc.com/2023/04/23/how-hbo-survived-aol-and-att-mergers-and-revolutionized-television-.html. Accessed 27 Jan. 2025. 

"Home Box Office Inc.—Company Profile, Information, Business Description, History, Background Information on Home Box Office Inc." Reference for Business. Advameg, Inc. Web. 27 Jan. 2025. www.referenceforbusiness.com/history2/11/Home-Box-Office-Inc.html.

Walfisz, Jonny. "50 Years of HBO: A History of Historic Television." Euronews, 11 Dec. 2022, www.euronews.com/culture/2022/11/12/50-years-of-hbo-a-history-of-historic-television. Accessed 27 Jan. 2025.