It’s Not Cable; It’s HBO On Demand

Eric Kessler isn’t concerned that The Sopranos is on ice until early 2006. The HBO president of sales and marketing isn’t worried that Sex and the City has left town for good. He’s not anxious that Curb Your Enthusiasm and Six Feet Under may not return until after next Labor Day. That’s partly because Kessler is confident in HBO’s upcoming lineup (which includes the June premiere of the Tom Hanks-produced series Big Love and the $100 million miniseries Rome in September). It’s also because of the success of HBO On Demand, which is now in more than 5 million homes. HOD accounts for about half of video-on-demand requests in HBO homes, "significantly reduces churn" and is generating its own watercooler buzz, Kessler says. For instance, HOD homes sampled Curb Your Enthusiasm in unprecedented numbers and helped boost ratings for its linear third season. To keep bringing folks back, lengthy previews of new series—the first 18 minutes of Entourage, the first 12 minutes of Family Bonds—were added to the on-demand lineup before the linear premieres. "The beauty of on-demand technology is it’s very flexible," says Kessler of the 25% weekly refresh rate that fills 300 hours of content per month. "We’re creating HOD stunts so it’s not just the first six episodes of a series, it’s the four best episodes featuring Christopher, or fans’ favorites or the best marital scenes between Tony and Carmela. With content sales—DVDs, foreign, syndication—representing 20% of HBO’s revenue, it’s adding more DVD-style features such as behind-the-scenes footage to lure viewers to HOD. "People enjoy watching that, and we have a lot of exclusive material," says Kessler. That savvier approach to leveraging its powerhouse brand, not to mention some of the best programming on television, is extending to HBO’s cable affiliates. "We adopted a new approach in the past year," says Bernadette Aulestia, VP, subscriber marketing and brand development. "With distributors on both sides focusing on their multiproduct strategy—HD, DVRs, SVOD—their attention is on how to package all these multiple products." Affiliates asked the brand to suit up in more battles. "The `one size fits all’ model—the one big promotion or big idea per quarter—is not what they need," says Aulestia. "Instead, they’d say, `What we really need is to focus on these three elements.’" A website (dubbed Quick Response Creative) for downloading and customizing affiliate marketing materials was launched, and the direct marketing group was charged with coming up with customizable and flexible plans for each distributor. The first wave of these multifaceted campaigns kicks off this quarter, when Comcast showcases both HBO the premium service plus HBO On Demand and HBO HD, while Cox starts running an HOD-centric campaign it its markets. The New York Co-Op of three MSOs received a locally flavored campaign to distribute clips from two New York-based programs—Family Bonds and the documentary Nine Innings From Ground Zero—as broadband content to high-speed Internet subscribers. "Affiliates can now see us as the sexy brand that humanizes their products," Aulestia says. "Whereas we used to call these one-offs, one-offs are basically our life. Everyone’s in different stages of their rollouts [so] it’s about meeting their needs at that moment with something unique to what they’re trying to accomplish." New campaigns in 2005 will help drive DVRs and telephony, "with some markets even talking about ITV," she adds. "We’re looking at ways we can imbed our content into all these new product lines." Here’s one suggestion sure to please subscribers pining for Larry David and James Gandolfini: ring tones playing theme songs from The Sopranos and Curb Your Enthusiasm. Now that’s sexy affiliate marketing.