HBO & HBO Max Content Chairman & CEO Casey Bloys Talks Prestige Content

0:00In complex industries, general financial advice isn't enough. Whether you're navigating global payments, cross-border funding, or operational complexities, HSBC, corporate and institutional banking can help you connect capital with opportunity. Set your business up for success. Search grp.hspc forward slash USCIB. Bloomberg Audio Studios Podcasts Radio News Casey Bloyes is chairman at CEO of HBO and HBO Max content in conversation right now. So you joined HBO in 2004? One of your favorite topics is at the time your competition was showtime and stars and effects and AMC came around. Well, when I started it was really showtime. HBO and showtime. But I was over the next five years you had AMC with madmen and that's it anyways.

1:01Why do you think that every single one of those other companies or brands either doesn't exist or is kind of in a diminished form, whereas HBO is still a name that everyone knows? Well, I mean, some of it is going to be corporate ownership and who prioritized what? But they prioritize HBO for a reason? Yes, they did and what I would say is I was lucky enough to grow up and most of my team has been at HBO for at least 20 years if not longer. We were lucky to grow up in a culture where there was no there wasn't fear of experimentation. We were encouraged. We took it was also a culture of taking our time and pushing to get things right. And that was encouraged and we learned how to give thoughtful notes in a hopefully thoughtful way. We didn't rely and still don't rely on research for what kinds of shows to make.

2:05A lot of it was just based on being there, working on shows, taking chances on shows and that being encouraged. So we were all lucky to grow up in that culture. How do you think the HBO approach to programming or what people think of it, HBO has changed with you versus your predecessors? I actually think one of the, I guess I would say the hallmarks of HBO, we would in our culture, in our DNA, back in the day, we were one of the few people asking for subscribers to pay for HBO. So we would go through this process of does the show feel different, does it feel like it's worth paying for, does it feel like a big spectacle, does it feel like a voice that you haven't seen before, does it feel like a different take on something. So we would go through this process of looking about what's out there and what's not on the air and what we want to see. That has continued. If you think about just in my time there,

3:09when we did Game of Thrones, that was considered a Swords and Sandals show, why would HBO do that? Euphoria at the time. You do a type of show with a twist. Kind of, but it's also at the time, when we did Euphoria, that was the youngest lead of a show that we've ever had. And it was kind of like, why is HBO doing clean programming? Well, this is our version of... I think you four is a little different from the summer I'd turn. Yes, yes. But the point is, there are shows along the way that if you were saying, well, that doesn't seem like an HBO, that's kind of what you have to keep evolving and changing what someone might think of as an HBO show and what the defining characteristics are, is it TV worth paying for, is it different in some way, is it spectacle? I think Game of Thrones, even from the Earth to the Moon or Band of Brothers, television hadn't been made at that scale before.

4:12So that is one way to define TV worth paying for, and maybe it's pushing boundaries in another way. So there's a lot of different ways to define it. There's no... Well, but Daniel will probably do that. That's not how you differ from Richard, but we'll table that, because you said something that I want to follow up on, which is you have been a subscription service all along. So why, if HBO is a subscription service all along, was it so slow to really lean into streaming? Like, why is an HBO where Netflix is right now? Well, I think you know the answer to that with all legacy media players is the revenue that everybody was getting from the cable bundle, from Netflix, from streaming services, was very hard for legacy players to give up on. The more we get into streaming, we all kind of look back on the cable bundle and say, yeah, it's a really good business. Very, very good business. But things evolve, and it takes legacy players time and various...

5:21You're still working on it. That's better. I think you're doing... Yeah, everybody is, but I would say, when I look around the landscape, I think what Dan and Disney are doing, what we're doing, hopefully what we're doing together, we are starting to be real competition in streaming, and we're profitable. I'm going to ask about that in a second, but one quick thing. So your streaming services had a lot of names. Yes. You've had HBO Go, HBO Now, HBO Max, Max, Back to HBO Max. What was your favorite name? Well, I do actually, I get confused between going now. Now was... Now was the stand-alone... Now was the stand-alone. Yes. But remember the phrase over the top? Yep. Nobody talks about that anymore, but in 2015, we went over the top, and that was like a thing. Nobody talks about over the top. Well, they also mostly got rid of S-Fod as a concept. Yes. You mentioned competition. For most of the last decade, or a lot of it, at least, you were

6:22going to measure it against Netflix. What was your first response when you found out that they were going to buy you? At this point, you have to understand I'd been through two mergers. So, there's in this business, which is clearly being disrupted, and having gone through two mergers, I don't think there's any announcements that would have shocked me. Not even the president buying you? Well, that... I mean, I don't know. But truly, you kind of get used to... There was a rumor among the many rumors that somebody said, I heard Walmart's going to buy you guys. And I was like, oh. I had someone... There was a couple days ago say Walmart was going to buy Netflix at some point. There was a theory, and if you look at what Amazon is doing as a complement to their shipping business, you know, like I'd say, oh, okay, well, let me wrap my head around that. So, you kind of have to be open to whatever. So, I was not shocked.

7:27You're obviously not combining with them. So, how do you judge them as a competitor right now? Well, they are... Obviously, the leader in streaming. They are so far ahead of everybody else. From a technological point of view. And that really helps drive their business. When you talk about engagement or you talk about churn, the things you can do to mitigate it, a lot of them are product or technology related. And they have been at so long, and they're just, you know, far ahead of us. We're all catching up. We're all trying our best to catch up, but they have a real expertise in that. And they... We've been in competition, as you said, for over a decade. And all of our competitors are good and worthy competitors. But I guess when you look at, you know, they have had for the first time that I'd say in a long time, and they've probably had the longest programming drought this year that I can remember them having. Do you look at that and say, this is just a little blip, they'll be fine, they'll be fine. I look at it and I say, yeah, they're a media company. They're doing shows, and it's very natural to

8:33have highs and lows. I don't think there's anything unusual about it. And, you know, as has always been the case, one show, one hit, changes the narrative. So... Apple won more Emmys than you this year. Did they? Was that covered? Did you call and congratulate that? Of course, yes, yeah, no, I... Did you mean it? Yes, yes, listen, as... Oh, thank you. Now do the last 20 years. No, like, obviously, as you talked about Netflix beat us one year, then we beat them. I think we tied last year. The Emmys are obviously, we like the competition. It is one metric of, oh, people think these are quality programs. But as I say every year, whether I have more nominations than anybody else, which I... which we got this year or come in second or third or

9:35whatever, that doesn't change the shows we're going to do. I don't go on, I guess on Tuesday morning this year, I don't go. We got to change our strategy because we got a handful more or less than anybody else. It is a nice indicator. It is a nice metric, but it's not the reason that we do shows or not. What is your response when people say Apple is the new HBO? Well, again, I think every... You say it a lot. And again, the only thing I say is I... I don't say it a lot. I'm... You say it a little bit. No. That is not saying that the new HBO... No, I am probably one of the most vocal public skeptics of that particular strain of thinking. I remember once getting like, savage on threads of all places when... What are you doing on threads? For saying that people are overreacting on Apple. Yes. Well, and I would agree with that because again, I take a long-term view. And as you said, when I first started in 2004, it was HBO versus Showtime. Showtime was going to eat our lunch.

10:42And then it was, for a minute, it was stars. I think they had a show called Boss, and everybody said, this is the new... Kelsey Grammar. That's a great, no funny story. That show is why they didn't bid on House of Cards. Why they didn't? Yeah. Well, so then it was stars the new HBO. AMC is the new HBO. FX is the new HBO. Netflix, House of Cards is the new HBO. Amazon is the new HBO. Now Apple is the new HBO. So the only thing I bring up is the historical context of how many new HBO's there have been. And so I would like to reframe the... I would like to reframe it a little bit to... Not is so-and-so that the new HBO, but how does HBO continue to remain HBO? I think is the more relevant question. We're going to get to that in just a second. But I have one... There's a lot. A lot of... You're saying we're going to get to that. We're going to get to that. Well, because... Well, I said it twice, but if you can jump right... It's fine. We will jump right into it. Was that all the intro?

11:42Now we're good. Yeah, this was a powerful intro. Now we're going to the meat of it. Okay. What advice do you have for David Ellison as the new owner of HBO? Well, I will say I've obviously I've had conversations with David and he is a... He's very, very excited, very respectful of what the HBO team has done. Not just in my tenure, but the entire history of HBO. And he's excited. So I think is in all of the owners that we have had, we have had people come in genuinely excited and wanting to maintain what we've done. And I believe that he will... I really believe he will do that. Well, you say maintain. I would say from the outside... Excuse me. I would say from the outside, every company that has bought HBO has tried to take the streaming service and compete with Netflix. Well, I would say... And not by keeping this HBO, but we're going to broaden it. We're going to do more

12:45with AT&T with talking about making miniature Game of Thrones or mobile Game of Thrones or David's As Love came in and folded in all of the discovery programming and then they get in and it doesn't really work. Yeah. When people talk about HBO, I think you have to remember the history of HBO was part of a larger video package. It always existed as part of a larger package. When the cable bundle kind of goes away, it is not the primary way that people get HBO anymore, it does need a larger package. Again, back in the 2015 years, the idea that you would take HBO and add the Warner Brothers library was radical. It was, oh my God, you're going to have HBO next to friends and big bang theory in EAR. How could you do that? A lot of hand-ringing. I would say that was a very successful broadening out of the service. Again, not HBO, but a larger service. A big

13:48part of HBO has always been pay-one movies. When you think about, okay, so you got HBO, you got pay-one movies. Now you got the Warner Brothers library. As long as we're being thoughtful about how we broaden out, people who watch HBO like watching television, they don't just watch HBO. They like watching library movies. They like watching pay-one movies. They like watching library shows. I think you have to be careful about that. You mentioned discovery and it didn't work. I think one of the things you also have to think about when you are talking about trying to increase engagement or broaden the aperture, you have to be careful about you do it. About how you approach it. One of the things we found with discovery was we'd say, okay, well, here's HBO and the Warner Brothers library and pay-one movies. Here's the discovery content. What we found, put it out in the world and what we found through research with lab subscribers, current subscribers, potential subscribers,

14:49is they didn't want it. We have a strategy officer who has a good line, which is you have to give subscribers what they want, not what you own. We found very quick in doing research on Max. Subscribers said we want movies. We want HBO. We want drama series, comedy series, documentaries, and they just weren't feeling some of the other stuff. We have to listen to that. You have to evolve. I would say a better experiment in terms of broadening out was what we did with the pit, which was what if we do a network show basically? I say network, not because of the content, but because of the format, the 15 episodes and the annual return. Why that show has been so successful, not only in the Emmys and not only in its performance, but it has actually broadened out people on

15:51HBO Max who tend to watch the library movies or library series are consumers of the pit, as well as some HBO subscribers. You've successfully broadened it out and you haven't radically changed the value proposition. That's why I think the Warner Brothers library, originally people said, oh my god, how could you do that? It didn't radically change people's value. People describe subscribers, look at that and find value in things like that. I was talking to someone earlier this week who said that HBO and Paramount plus basically have the two most divergent customer bases that they in a lot of ways don't mesh naturally. I've had people say to me like, oh, okay, so the Taylor Sheridan stuff in HBO. It's a version of what people said to us about HBO and the Warner Brothers library. Again, I go back to people who watch HBO tend to like television, tend to be consumers of television and that doesn't just mean HBO. We had South Park on our platform,

16:54one of the big properties at Paramount Plus. You know, it did so well, we sued them when they got sick at all. How do you think the fit is with HBO and ridiculousness? I would say, again, some of when you look at some of the stuff on TBS TNT, the show, my kids used to love practical jokers. Yeah. You know, again, not everything. It's going to be broader. And of course, you can pick out, you can cherry pick shows and say, oh, well, what about this or what about that? You have to think of it a little bit more broadly, but I don't have a problem with it. Okay. Do you expect that HBO and Paramount will be merged? Or bundled? You know, if you will get to my disclaimer in a minute. Okay. All right. But I would say, I thought I was supposed to be the one thing in a minute. Well, you kind of, yes. Okay. So I would, I would say that I don't want to comment on like what is going to happen or anything like that,

17:55but I would point to the HBO Max Disney bundle, which has been very successful. So could you see something like that happening? That would make a lot of sense. As I believe most people know your contract is up next year. Your current contract stipulates that you report into the CEO of Warner Brothers Discovery. What will it take for you to work at whatever this combined company is? Well, I'm not going to get into my job requirements or anything like that. But so here's what I would say. Obviously, there was news this week. And obviously, there's, there's, there's news across the board. I will say that the merger is not closed. I believe that David and the team want to announce their leadership structure is not mine to announce. So I don't have any news for you to confirm. But they did confirm that they are ahead of streaming Cindy Holland is leaving. Yes. Which would seem to create a vacuum ready made for you. Again, not my confirm.

18:55Feel is not closed. But obviously, you know, yes. I believe, I believe Michael Fuchs had the longest run of any head of HBO 11 years. Do you think you'll beat that? Well, I guess I got one more year to go. So you would say you. Oh, sorry. No, I was so I became Richard. Richard made me presentable all programming in 2016. So it just depends on. I'm counting when you succeeded Richard as the head of HBO. It should have been 2019, I think, or 2018. Okay. I got a few more years to go. All right. Let's see. When I was talking to some producers and agents in the run up to this last week. And they there was a general sentiment, especially I'd say among producers and studio people, that it just sucks working in the TV business right now. That it feels harder to sell things. There are fewer buyers. It's just all the things you know about how the last years have gone in

19:57this business. Oddly, they they feel better about the movie business. Why is why do you think everyone is so down and what is it going to take to turn it? I I believe that everybody feels this way because I mean, we are in industry and disruption. You know, we we used to compete against people who were selling cable subscription or advertising. Main product was video entertainment. How are you going to classify that? And we are now competing against companies that are in very different spaces. Have different economics. We're also on the the backside of a bubble person. You know, we went from 600 shows to 400, 450, whatever it is. Whatever it is. So if you just think about just in those numbers, 200 shows and the average show, depending on how big it is, is a couple hundred you know, good paying jobs. That's that's you know, a catastrophe. That's very personally that is very

21:01hard across the board. That is what it looks like when a bubble burst. It is it's ugly. You know, obviously on the way up, there was a lot of opportunity. People were green lighting shows based on an idea. It was not sustainable. It probably was not, you know, you couldn't make that many shows as an industry and monetize it properly. So it was never going to be sustainable. So while there were some, you know, a bubble has some benefits on the way up in terms of people learning on shows because there's so much work, the the downside is is it's really painful. So my hope is, you know, like any industry that gets disrupted, there is mergers, there is new players coming in. Maybe we will find some, some certainty, some calmness, but you know, if you take the long view of entertainment, this is this is what happens. It's hard when you're in the middle of it, when you're in

22:02the eye, it feels like you're in the eye of the storm. But in the long run, this is entertainment. Technology has always played a part in disrupting. So when you give advice to young executives, are young creative people, do you tell them to stick it out? Do you tell them to start a YouTube channel? Well, it depends on what they want to do. It depends on if they want to be an executive, if they might write a director. You know, I have kids in college and this is the only business I know. So my daughter expressed some interest in maybe going to work for a nonprofit. I was like, I don't know what to tell you. It sounds nice. But I still believe that, again, coming on the back end of a bubble, I hope that there is a time when the mergers have been completed and we have buyers and things have settled down. I still believe there is, I know there is a market for

23:06well-produced movies, dramas, comedies, documentaries. I still believe that. So I would not tell people don't come into this business, don't take a chance. I still, I like it. I think it's a lot of fun. I'm hoping we're on the back half of a difficult time. You brought up movies and I'm wondering, there's a company out there that I feel like fits with your brand. They produce a bunch of TV shows. Why has HBO never bought a 24? Why have we never bought it? We're too busy being bought by other people. But I will say, we have their pay one, which is great and we've been in business with them for a long time on various shows. So I agree. We love them creatively. I think their brand is complimentary. We love the pay one relationship. But I don't know. I don't want to speak for them, but I don't know that they have wanted to be bought. I think they would if the number were big enough, but it'd be

24:08a number I don't think you guys would want to pay. There's been a lot of discussion about YouTube in Hollywood circles. What is HBO's YouTube strategy or why not? Because you're so selective about what you put on the air and they tend to be a pretty big budget. Would you just see a bunch of ideas on YouTube and see which one works and bring it back? To some extent that happens naturally. If you think back to East Array, I'm just thinking about something. I think there's a lot of ways for talent to showcase themselves. YouTube, obviously. But I think you're are you asking more generally how we view YouTube as a... How do you think about using it? Not like how can HBO most effectively use that to improve its business?

25:09Well, I mean, obviously from a marketing point of view, I think there is absolutely talent as a talent scout. The way we used to are used to go to comedy clubs. But not necessarily doing what Netflix and Disney are doing, which is signed deals. No, for us, one of the things I think you need to be mind-loving, it's a little bit based on our experience with the discovery content, is I think you have to not get into mission creep meaning don't know what you're good at. Be smart about if you need to make changes to it or add a different line of programming. Be very clear about why you're doing it and what you expect from it. And can you do it well? But if you're chasing engagement by just putting a lot of stuff on, I think you can kind of lose the thread. And again, that's where I know it. That's what

26:10subscribers told us about some of the discovery content was like, this isn't what we want from you. This isn't what we expect from you. That's not to say that a lot of the ID true crime docs worked, some of the TLC reality shows worked. So it's not to say nothing worked, but you do have to listen to your subscribers and you do have to remember what they're coming to you for, what they value you for, and not changing that value proposition too much or you're going to kind of by chasing something else, you're going to lose your core. We're going to do some quick questions. Oh, we've got a couple of five words or less. Wait, I'm going to do what? We're going to do a few quick questions, five words or less answers. I could five. Okay. Who is a better owner AT&T or discovery? I'm not going to answer that. Is that five words? I'm not going to answer that. Well, hopefully we're not repeating that for all these. Prior to becoming the head of HBO, you worked for three CEOs, I believe Chris Albrecht, Bill Nelson, Richard Pleppler. Who had the best run?

27:13Well, listen, they, I will say everybody at HBO has been, it's been, the secret to HBO has never been not five words or less. Oh, well, I have, let me explain, it's an interesting question. So, let me, let me turn it for you, because the, the secret to HBO success has not been any one person, you know, and I think all of the people you just, you just mentioned as well as me would say that. It's not me, it's not Richard. It is the entire team. It is the culture. It is in the DNA. It is how we all grew up. Richard is the guy who made the head of comedy, the head of all of everything, and took a chance on me. So, I'm always going to say Richard, although in reality, all of them were, I learned from every single one of them. What was the biggest bust in HBO history? John from Cincinnati, vinyl or the idol? John from Cincinnati, vinyl or the idol, which was a bigger bust? Well, I'm, here's one, again, this is not a five word answer, because I don't like to think a thing, part of the culture is,

28:19I don't think when a show, all of those shows probably did not live up to expectations, but I don't like the culture of like this, you take chances. You take big swings. Some of them are insane. Some of them work. Maybe those three didn't. Two more than a little. But I think you should be proud. Proud to learn from failure. Yeah. Who's a better programmer, John Landwrap, or the Apple guys? Now, why do you think I'm going to answer these things? It's still fun to ask you. Okay, fine. All worthy competitors. Well, finished with an easy one. True or false, Harry Potter will be the most watch show of the year. Well, at the year. I know it comes out late. I'm not going to set expectations like that. You're trying to set these little traps that I'm never going to watch in apps. They're just reasonable. I will say, I think I have seen the entire season and it is great and I'm very, very happy. So I feel really, really good about that. Christmas day, I think a lot of people

29:19will be watching around the globe. Okay. Casey Blois, title to be determined. Thank you. All right. Having a little bit of fun there in the theater up here at Bloomberg Screen Time. Of course, was Casey Blois, chairman and CEO HBO HBO Max content with Lucas Shaw managing editor media entertainment and sports. With HSBC, corporate and institutional banking, finance stays simple as your global footprint grows. Find your next financial partner. Search grp.hsbc forward slash USCIB. If you listen to financial news, you know a lot of time to spend thinking about what's next. The next opportunity, the next investment, the next move. But sometimes what matters most is being ready for what you never saw coming. For more than 75 years, Cincinnati Insurance has worked with independent agents to help protect businesses, homes, valuables and more. Because planning for the future isn't only about knowing what's next. It's about making sure you're ready for what you

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