For HBO chief executive Richard Plepler, the decision to launch a streaming service was approached with the care of a politician mulling whether to launch a campaign.
More than a year ago, the former congressional aide saw the great rise of online video but needed to understand the risks to HBO’s traditional business delivering its shows only to cable subscribers. So he called a friend, pollster Doug Schoen, to study whether launching a streaming service was worth it and how he could reach out to new online customers.
What he found was that HBO was missing out on nearly 10 million households that might want to watch the premium channel but did not subscribe to cable. They were mostly younger consumers — people who have never subscribed to cable. Plepler hoped to target them for the new online service.
“We waited for the time and place of our choosing to launch our streaming service,” Plepler said at an event Friday hosted by The Washington Post and George Washington University. Plepler was one of several chief executives talking at the “Executive Actions” event, including Siemens USA’s Eric Spiegel, KPMG’s John Veihmeyer, Johnson Publishing’s Desiree Rogers and MGM Resorts’s James Murren.
This month, HBO launched its streaming service, called HBO Now, with Apple and Cablevision as partners.
Plepler said that so far, HBO Now subscriptions have exceeded expectations. He said the service is a “millennial missile” for its appeal to younger consumers.
HBO Now is years behind Netflix, Hulu and Amazon, companies pouring billions of dollars into original programs rivaling HBO’s shows.
Plepler bristled at the idea that HBO has been late to the subscription streaming business. And he disagreed that the new streaming service will hurt the more traditional part of his business that still depends on the cable bundle. HBO’s fees to cable companies to carry the premium channel’s programming bring $5 billion annually in revenue.
“This is a multilateral approach to creating new ways for different consumers to watch us,” he said. “This is not a zero-sum game.”
Indeed, Plepler said he doubts the end of traditional TV in the next five years. Instead, he said consumers will like new bundles and will watch some shows only on big TV sets.
He said he isn’t a fan of some experiments by streaming competitors to release at once all of a television show’s episodes for a season.
He said the ability to build up suspense over weeks helped increase interest in the HBO documentary miniseries “The Jinx,” for example.
Cablevision has been the only cable partner to offer HBO Now. Broadband Internet customers of Cablevision can add HBO’s stand-alone service as an extra to their package. Plepler said more cable providers will participate soon.
He said he has also been talking to new potential digital partners, including SnapChat. Executives of the photo-sharing and texting app recently visited Plepler’s office to show him their Discover feature, which allows media partners CNN, Food Network and National Geographic to spread their content through the SnapChat platform.
At the “Executive Sessions” event Friday, chief executives from a wide spectrum of industries — including publishing and manufacturing — offered advice to other business leaders and student members of the audience.
“We want people who show up, who work hard, who are adaptable, who can think critically, and who are going to be willing to change themselves and build new capabilities over time,” said Spiegel from Siemens USA, “because we don’t know what they’re going to be doing in five years and they don’t know what they’re going to be doing in five years.
Veihmeyer, KPMG-US chairman, said chief executives worry about their products and services staying relevant. “I think CEOs are paid to be paranoid,” he said. “If you’re not paranoid, you probably shouldn’t be CEO.”
The executives also discussed diversity and hiring practices.
“Education and money are the only ways we are going to see parity in the community I represent,” said Rogers, chief executive of Johnson Publishing — Ebony and Jet magazines are in their portfolio — and former White House social secretary in the Obama administration.
Both she and Murren, chief executive and chairman of MGM Resorts, talked about hiring practices and how diversity of thought influences corporate innovation. “It’s an incredible situation to say you can’t find talented men and women equally,” Murren said.
Lois Romano and Karen Tumulty contributed to this report.