AFTER 10 years spent making tons of money showing uncut first-run movies, Home BoxOffice, mighty trail blazer of American pay television has begun its second decade with a vastly expanded agenda of original productions and promising projects. It's such an impressive prospectus that it suggests HBO now has the potential of evolving into the "fourth network" that public TV has never quite managed to become.
Until now, HBO, owned by Time Inc., wasn't much more than a movie projector hooked up to a communications satellite. But with its ambitious leap into a realm far riskier, HBO is putting much of the bounce back into all those seemingly dashed hopes about cable TV as a medium of deliverance from regular TV. HBO is nothing if not middle-of-the-mainstream, and largely cautious in its approach, but it is also unquestionably the most visible and vital cable TV attraction, so visible that some people think HBO and cable TV are synonymous. They are not, and yet it could be said that as HBO goes, so goes cable.
"I don't expect people to turn on HBO and say, 'Oh my God! Where have we been?' " concedes Michael J. Fuchs, an HBO executive since 1976 and now the undeniably dynamic president of HBO Entertainment. "HBO's not going to be the only channel people watch. You sit in front of HBO 24 hours a day and then you're in an insane asylum. But I'll tell you, as a viewer, I go through the cable spectrum before I ever hit the network dials. I look for sports. I look at CNN the Cable News Network . I look at Cinemax an all-movie sister service to HBO . I probably watch ESPN the all-sports channel more than anything.
"But I look at everything in cable before I turn to the commercial realm. If there is an alternative, it's cable, not HBO. HBO, singularly, is not going to be the alternative."
HBO isn't even "the best thing" on cable; that honor goes to C-SPAN, the noncommercial public affairs network that carries proceedings of the House of Representatives and an increasingly see-worthy array of public affairs programs.
HBO, however, holds the brightest torch in cable TV, and HBO alone proved that pay TV can pay. Big.
HBO has grown phenomenally in the last five years--from 2 million subscribers on 731 affiliated systems in 1978 to 11.5 million subscribers on 4,500 systems as of last December--nearly three times as many as its nearest pay-TV competitor, Showtime. There are also an unknown number of shameless peepers--estimates go as high as 4 million--who get HBO illegally, for free, and HBO will attempt to trim that number radically when it begins "scrambling" its signal this summer. That will make it more difficult for people with satellite dishes to steal the HBO signal from the sky. And also, as it happens, make it possible for HBO to transmit movie soundtracks and musical shows in stereo for those cable systems that can provide subscribers with stereo transmission.
HBO adds from 2 million to 2.5 million new subscribers each year. Fuchs says the sister channel, Time's all-movie Cinemax, is "growing even faster than we expected."
The main course at HBO will continue to be movies, Fuchs says, but the production schedule for the months ahead is impressive, glamorous and inviting by any standard. It includes:
* "Right of Way," an original filmed drama about an elderly couple that teams Bette Davis and James Stewart for the first time in their careers.
* "Nobody Makes Me Cry," with Elizabeth Taylor and Carol Burnett as middle-aged friends helping each other through the wrangles and trauma of divorce.
* "The Terry Fox Story," starring amputee Eric Fryer in the role of amputee Fox, who made his own one-legged marathon run across Canada in 1980. The production, showing in May, is the first in the new line of "HBO Premiere Films," made by and for HBO, although "Fox" also will play in movie houses in Canada.
* "The Far Pavilions," with Amy Irving, Omar Sharif and John Gielgud in a mini-series adaptation of an M.M. Kaye novel set, and filmed, in India.
Some of these projects--movies costing $3 million to $4 million each to produce--will not be cablecast until next year, and not everything on the HBO drawing board is particularly upstanding; the service plans to begin "Eros America," a video sex magazine, late nights next fall. It also will continue, however, with the well-received "Fraggle Rock," the disarming new Jim Henson Muppet series; "Not Necessarily the News," which Fuchs considers "the No. 1 irreverent political comedy series on television" but is still going through growing pains (its laugh track occasionally drowns out the punch lines, for one thing); and a consistently successful series of occasional comedy concerts that this fall will feature Eddie Murphy in a one-man show that may, sources say, be taped in Washington during Murphy's upcoming summer tour.
This very weekend, HBO premiered the first of its three new one-hour filmed adaptations of Raymond Chandler short stories, called "Philip Marlowe, Private Eye," with Powers Boothe, looking like a grapefruit in a hat, in the title role. The first drama, "Smart-Aleck Kill," is crisp and slick; the series is a coproduction of, and also will play on, England's London Weekend Television. Almost everything HBO makes, it makes through financial partnership with other companies, often in other countries. Fuchs says that's the only way HBO can afford to do first-class productions.
FUCHS, 37, is no starry-eyed, high-minded video utopian. A grimly practical former showbiz lawyer who got his job of programming HBO largely through luck, cheek and chutzpah, Fuchs is primarily interested in making, or keeping, HBO a financially thriving enterprise. Time Inc., which owns HBO, did not break out HBO profits in its 1982 annual statement, but HBO entered the black way back in 1977, and the Time report did list "video operating profits" for 1982 of more than $160 million. That includes Time-owned ATC, which operates cable systems in 400 municipalities throughout the country.
Time is nothing if not Into Video. It has just launched TV-Cable Week, a class-act mag that addresses the crying, if not screaming, need for readable and comprehensive cable listings, a need even TV Guide is having a hard time filling. The magazine is distributed to 250,000 subscribers via six cable systems. Time expects circulation to grow to 700,000 by the end of this year and expects the magazine eventually to be bigger than Time magazine itself.
The big question for HBO, as original programming becomes a larger and larger part of its schedule: Will subscribers continue to shell out monthly fees averaging $8 to $12 for anything other than known-commodity movies that played first in theaters? Nothing has drawn as many viewers to HBO as its December showings of "On Golden Pond," watched by an estimated 90 percent of HBO subscribers. HBO's own lavishly publicized TV production of "Camelot," shown last year, was, on the other hand, a dismal bore once its Space-Age credits were over, and an embarrassing flop for HBO besides.
Fuchs says: "I don't think when a consumer watches 'Golden Pond' on HBO he says, 'Isn't that HBO creative, isn't that a unique program!' But when we make something that no one else has, that's ours, I think we get more intensity from that. I think these original shows deliver more than movies. I think the movies are like--when you rent an apartment, you know you're going to get the floors and the ceiling and running water and electricity and whatever else you get. It's those other little things you're looking for in an apartment--a terrace, a fireplace--that's what these original things are. These are the options."
He concedes "Camelot" was not quite the terrace or fireplace it was meant to be. "We were proud of the fact that we created all this whoopdeedoo," he says. "We realized we were able to create whoopdeedoo. In retrospect, 'Camelot's' sort of a tired story, so if we could create this whoopdeedoo around 'Camelot,' we began to get some confidence that we can create whoopdeedoo around original stuff."
Similarly disastrous were lame HBO productions, clunkily taped before live audiences in theaters, of weary Neil Simon comedies ("Barefoot in the Park," "Plaza Suite") already made into films and done to death on the dinner-theater circuit. Fuchs acknowledges this was not a successful ploy and says it helped direct HBO toward original filmmaking and original drama. Pay TV is learning, he says, that "just because something is hot in one medium, you don't move it to another." He says he turned down the TV production of the Broadway hit "Sweeney Todd"; he knew it wouldn't work. The Entertainment Channel, which did show "Sweeney Todd," got lots of gushy reviews for its trouble--but went out of business early this year. Fuchs was one of those who predicted the channel would fail.
"Most people don't understand their marketplace," he says with satisfied authority. Thus he turned down a TV version of Broadway's "Sophisticated Ladies" no less than five times, he says; it finally appeared as a pay-per-view attraction in some cities and did very poorly. "I would not buy it. There's not a book there," Fuchs says. "I wouldn't do 'Nine'. 'Nine' is terrific Broadway; it's not good television."
Meanwhile, the competition for movies remains extremely intense, even as HBO tries to wean its viewers from movies to other attractions. The movie companies in Hollywood hate HBO because it's such a tough deal-maker when it comes to buying the cable TV rights to films. They hate it so much they tried to start their own HBO, called Premiere, but the Justice Department smashed those plans on restraint-of-trade grounds.
Then, in January, five entertainment firms--including MCA (which owns Universal), Paramount and Warner Communications--announced formation of a new company that will own and operate Showtime, HBO's chief competitor, and The Movie Channel, which has yet to show a profit. HBO, at the same time, entered into agreements with some Hollywood studios guaranteeing HBO first rights to their films. HBO also "pre-buys" some films before a camera lens even opens on them. This year HBO has been lucky enough to pre-buy such features as "Tootsie," "Sophie's Choice" and "First Blood."
Of course, when you buy films before they are made, you're bound to end up with some resounding clinkeroos as well, in which case "You want to kill yourself," Fuchs groans. "We paid a lot of money for 'Megaforce,' and so few people saw it that it didn't even make a lot of the Ten Worst lists. As I watched it, I'm supposed to be seeing the ultimate in new arms, military stuff, but I'm looking at it and it looks like plastic! Then I find out that Mattel had an enormous merchandising deal. The stuff in the movie was made by Mattel. And it looked like it was made by Mattel!"
HBO also has "Six Weeks," a Christmas calamity at the box office, but he doesn't feel so badly about that. "It will be a terrific television movie for us," he says. "Emotional movies work quite well at home--tearjerkers. I just saw 'Table for Five,' which I don't think is a terrific theatrical movie. It is a sort of TV movie pumped up. But that intimacy and emotion brought into the house, I think, is very good.
"It's interesting--you look at the stars. The movie stars--the De Niros, the Pacinos--those guys wouldn't be television stars. You're not comfortable with them in your house. 'Raging Bull' was a big failure on HBO because it's De Niro, the role he played; it's just not a comforting movie. And you've got a different environment when you're in your house. I'm amazed horror movies still do well at home. That's the exception to the theory."
Movie studios aren't the only ones who hate HBO. Some independent TV producers hate HBO, too; they try to sell HBO on bold new concepts and HBO nixes them because they're too different--perhaps not "comforting" enough. Producers say HBO isn't looking for programming that is that much different from what those narrow-minded old networks want. Fuchs says: "I don't know if our goal is always to have what can't be done on network television. I would have loved 'M*A*S*H.' I like to go shopping on networks occasionally."
HBO almost bought the network series "Taxi" when ABC canceled it last year, but then NBC stepped in and picked up the show. In fact, says a top network producer, HBO was humiliated by the negotiations and NBC's apparent victory; it made HBO look small-time. Fuchs says that if HBO had bought "Taxi," it wouldn't have been "so terribly different a show" but would have been "more adventurous and interesting" than the constraints of a commercial network like NBC allow it to be.
Fuchs seems to be saying HBO subscribers want it to be different from network TV but not too different from network TV. There have long been rumors that eventually the two will grow more alike in one horrible respect: commercials. Some say it's only a matter of time before HBO reaches its maximum growth potential as a pay service and starts sneaking in ads to increase revenues. Asked if there will "ever" be commercials on HBO, Fuchs says, "Not to my knowledge, and not in terms of any plans around here. We've got a pretty interesting economic situation without them."
WHEN CBS Cable, the highfalutin' cultural channel, folded W last year (after losing $30 million for CBS), impromptu eulogies for the hopes and dreams of cable TV were heard from hill and dale. Dale, anyway. Fuchs says the passing of CBS Cable should not be read as a hope-dasher for cable TV generally. "I'm not sympathetic to CBS Cable because I thought they were hurting PBS" by driving up the prices for programming that appealed to both, Fuchs says. He thinks the death of CBS Cable is no ominous portent of cable doom.
"You know what the major problem is? A lot of people came in and looked at cable and said, 'This is FM radio.' But you can open an FM radio station in your closet. Video is so damn expensive and the public is so spoiled. They're going to want CBS Cable to look like CBS network--color, good sound, good pictures--and that is expensive."
Fuchs can remember when HBO was hardly the powerhouse it is now. When he was a negotiator for the William Morris Agency in 1975, he recalls, "HBO was like a desert. We used to rape HBO. Doing a deal with HBO was like, 'What am I gonna take today?' It was like a candy store. And yet, I thought, 'This is a cute little business. This has got some potential here.' "
Several years and millions of dollars later, the cute little business has burgeoned into a cute big business, the most noticeable part of the much beleaguered, still self-rejuvenating cable industry. Fuchs does not take his part in this movement lightly, even if he once considered HBO a joke. "It's been a rather dramatic step up, from where I had been, for me," he reflects. "It's been a lot of fun and, well, I don't know how often in your career you sort of catch history. This has been a real historical trip."