It was a dark and stormy midday afternoon nearly a decade ago in Manhattan as the man dashed from the HBO offices to the curb to jump into a cab, clutching his portfolio tight to protect it from the rain. The contents of that portfolio were invaluable. It was all he had.
Everything was riding on this, and they’d given him a shot. As he’d ended his pitch for a show about a mob boss facing traditional family problems that had landed him in therapy, the HBO executives had one directive. “Go darker,” they said.
The scene that day may or may not have looked precisely like that, but the directive was clear. HBO had been the first premium cable channel for movies, with occasional special programming featured. With the advent of movie channels invading the cable space, they were ready to be the first subscription channel to make a bold business model move. They were about to begin producing their own shows.
It worked. Not only have they never looked back, other subscription services followed suit with great success. (House of Cards, anyone?)
At heart, HBO didn’t really care how good the shows were. They cared about subscriptions. They cared that the shows be different enough to get everyone, including the press, talking about them. Inadvertently, this opened the door to allowing creatives the ability to do great work on a scale we’d never seen on TV before. This, of course, drove up subscriptions. And the upward spiral began.
Here’s what HBO has successfully done that businesses can emulate to promote future growth:
1. They chose a well-defined target.
HBO knew that they were appealing to a demographic not drawn to traditional-sitcoms and shows you’d regularly find on TV. They intentionally targeted groups interested in more complex characters. They targeted individuals unafraid of darker themes. They targeted women who saw themselves in a way they’d never seen depicted on TV before. (Sex and the City was ground-breaking back in the day.)HBO wasn’t trying to be all things to all people. They were specific regarding the audience they were seeking.
Businesses often struggle with this, afraid choosing targets will result in leaving revenue on the table. As technology continues to both connect and fragment potential customers, targeting becomes increasingly necessary to break through crowded marketplaces.
2. They invested in excellence.
HBO bought good stories. They invested in the writing. As revenue grew, they invested even more heavily in good storytelling, along with production value that had only previously been seen in movies. HBO made their shows so good people couldn’t help but talk about it. The storytelling itself became a differentiating point for HBO.
Business treats storytelling as fiction, as if it’s a soft skill. But storytelling is always grounded in – and reflects – truth. It’s the way a business drives engagement that drives revenue. It’s the way leaders communicate strategy to build a cohesive team. And it’s the way top-tier talent becomes attracted to a business. Storytelling has been the way humans connect since the beginning of time. The story is what people remember. It’s the way employees become brand advocates, and customers become evangelists. Investing in excellence in storytelling can be a differentiating point in and of itself when done well.
3. They developed stark-raving fans. (stark-pun intended for my fellow Game of Thrones fans)
Only 4% of your current customers will ever be stark-raving fans (aka, brand evangelists). A fellow entrepreneur recently shared the story of a client she’s been working with. As this business drew in $500,000 a month in revenue, they were spending $200,000 a month on advertising. Examining the analytics of their current client base, 4% were driving 80% of revenue. That 4% also spread the word about the product like wild-fire.
Game of Thrones is a show that produces only 10 episodes a year. Season five’s cliffhanger resulted in a full year of buzz and anticipation around one question — is Jon Snow really dead? Even those who downloaded (and paid for) Game of Thrones through channels like iTunes, are now scrambling for a subscription. (Because who doesn’t want to know how Jon Snow is coming back to life in real time?)
In targeting, and delivering, for their 4%, HBO created a ground-swell of buzz that led to a ground-swell of growth. The lesson? Pay special attention to the 4%. Doing so not only garners revenue, it attracts the talent you need to grow.
4. They attracted talent.
Following the success of shows like the Sopranos, Six Feet Under and Sex and the City, one need only imagine where the best producers, directors, showrunners and writers flocked to. Talent acquisition was no longer a problem. As talent came out of the woodwork, HBO gave that talent the resources and space for creativity required, driving the quality of their product up even further.
Being known for doing great work, as well as being known as a place that hires talent, provides resources and then leaves them unencumbered to do the great work within them that they’re yearning to do, only fuels the upward spiral of success.
HBO did something bold, something new. They created unique programming for a subscription channel, and managed to change the game for their entire industry. The same tactics can be used in other industries and in other businesses. Those who dare lead might find themselves winning the Iron Throne in the end.
Deb Owen is the founder of Percorso LLP.