Home Box Office, Inc.

Home Box Office, Inc. (HBO) is an American media and entertainment company operating as a subsidiary of Warner Television, a subsidiary of Warner, Inc. Founded by Charles Dolan and based in New York City, its main properties include its namesake pay television network HBO, sister service Cinemax, streaming services HBO Go and HBO Now (a tertiary HBO-branded service, HBO Max, is operated separately), and HBO Films. It has also licensed or maintained ownership interests in international versions of HBO and Cinemax.

The company has achieved several pioneering innovations in the cable television industry, including its satellite uplink of HBO as the first television network in the world to transmit through that technology, and the development of original programming for pay television. The headquarters of HBO's properties are located off Avenue of the Americas (Sixth Avenue) in Midtown Manhattan.

Early history
Home Box Office, Inc. traces its roots to the development of the namesake Home Box Office (HBO) pay television network by media executive Charles Francis Dolan, in conjunction with the Time Life unit of Time Inc., in 1972. Dolan was looking for a way to help his struggling cable company in New York City, Sterling Manhattan Cable (which eventually evolved into Time Warner Cable, which merged into Charter Communications in May 2016). Sterling had consistently lost money since its founding in 1965 through both expenses incurred by running cable wiring underground and into buildings throughout Manhattan (costing as much as $300,000 per mile), and Sterling's difficulties in expanding its limited subscriber base (by 1971, subscribership for the Sterling system totaled to about 400 customers). During a family vacation in France in the summer of 1971, Dolan conceived "The Green Channel", a concept for a cable-originated television channel that would be distributed via Sterling Manhattan and other participating cable systems. He later presented the idea to Time-Life management, which were persuaded to help him develop the service.

The service—which Time Life and Dolan settled on naming " H ome B ox O ffice", originally intended as a placeholder name to meet publishing deadlines for the service's research brochures—launched on November 8, 1972 over Wilkes-Barre, Pennsylvania's Teleservice (now Service Electric) cable system. Time Life originally planned for HBO to debut on a Teleservice system in Allentown, Pennsylvania, but, per an agreement with Teleservice president John Walson, moved the launch system to the company's Wilkes-Barre system to avoid blackouts of NBA games scheduled to air on the channel. In late 1972, Time-Life, Inc. bought 60% of Dolan's equity interest in Sterling Manhattan Cable, and announced its intention to restructure the system as Manhattan Cable Television beginning in March 1973. Gerald Levin, a Home Box Office programming vice president since the start of the network's operations, replaced Dolan as the company's president and chief executive officer.

Initially relaying its programming via a network of microwave relay towers throughout the Northeastern United States to participating cable systems carrying the channel, in 1974, Time Life decided to uplink the HBO programming feed to communications satellite in order to reach cable providers throughout the United States that they would not have been able to reach through the more financially and time expensive microwave transmission method. Levin raised $6.5 million to acquire a five-year lease for a transponder on the Westar 1 satellite, gaining the backing of the Time-Life board.

HBO began continuously transmitting via satellite on September 30, 1975 for the broadcast of the "Thrilla in Manila" heavyweight championship boxing match between Muhammad Ali and Joe Frazier from the Araneta Coliseum in Cubao, Philippines. The broadcast that marked the television industry innovation was received by UA-Columbia Cablevision's Fort Pierce and Vero Beach, Florida, systems, and American Television and Communications Corporation's Jackson, Mississippi system, alongside systems already receiving HBO via microwave beforehand in the northeastern U.S. It also gradually turned around the fortunes of HBO: at the time Time-Life, Inc. bought the remaining interest of the channel in September 1973, HBO's subscribership amassed only 8,000 customers across 14 Pennsylvania cable systems and was hampered by significant churn rate as some subscribers cancelled their service because of the repetitive scheduling of programming. By 1980, HBO was carried on cable and MMDS providers in all 50 U.S. states, with more than three million subscribers nationwide. Other cable channels followed HBO's footsteps in satellite distribution; in December 1976, Atlanta superstation WTCG-TV—now WarnerMedia-owned basic cable service TBS, and owned by Ted Turner at the time it went national—became the first television broadcaster to transmit via satellite as a basic cable service. This, along with the CBN Satellite Service (now Freeform) launching by satellite in April 1977—pioneered the development of basic cable, using HBO's blueprint of utilizing satellite delivery for the cable television industry.

Early expansion
As the HBO television service was growing nationally, Time-Life efforted to develop companion pay services to sell to prospective subscribers, including existing HBO customers. Home Box Office's first attempt a secondary service was Take 2, a movie channel marketed at a family audience that launched in April 1979. The "mini-pay" service (a smaller-scale pay television channel sold at a discounted rate) tried to cater to cable subscribers reluctant to subscribe to HBO because of its cost and potentially objectionable content in some programs. Take 2, however, was hampered by slow subscriber and carriage growth, forcing Time-Life to shut down the channel in September 1979.

HBO executives then decided to develop a lower-cost "maxi-pay" service: Cinemax launched on August 1, 1980, as a companion movie channel designed as a direct competitor to The Movie Channel (then owned by Warner-Amex Satellite Entertainment, part-owned by WarnerMedia predecessor Warner Communications). Compared to Take 2, Cinemax experienced far greater success because of its reliance on classic feature films from the 1950s to the 1970s, mixed with some more recent films, incidentally benefiting from the limited headend channel capacity offered by cable systems and customer demand for uncut broadcasts of theatrical movies. HBO traditionally marketed Cinemax to cable operators for sale to subscribers as part of a singular premium bundle with HBO, available at a discount if electing to subscribe to both channels. As Cinemax evolved, it expanded into non-film programming content, including music specials, some limited original and acquired programming (such as SCTV Channel and Max Headroom) and, most notably, late-night softcore pornographic films and series; the adult programming—initially offered as part of the "Friday After Dark" block, eventually expanding to all seven nights by the start of the 1990s—became a key draw for Cinemax subscribers, and the main association with the channel in pop culture. Pornographic adult programming on began to be de-emphasized from the linear Cinemax and HBO Zone channels' late-night programming in 2011, as part of the former's refocusing toward its mainstream feature films and then-emerging slate of original action series, and was removed entirely from Home Box Office's linear and on-demand platforms in 2018.

Film and television production
Home Box Office, Inc. began diversifying its portfolio beyond cable television during the 1980s. In 1982, HBO entered into a joint venture with Columbia Pictures and CBS Theatrical Films to form Tri-Star Pictures (the hyphen in the name was removed in 1991), in order to pool resources to split the ever-growing costs of making feature films. The studio's first production, Kevin Costner-led The Natural, was released in 1984. Tri-Star entered into the television production business, in April 1987, with the formation of Tri-Star Television. Towards the second half of the decade, the partnership transitioned into a singularly owned entity: CBS sold its ownership stake in the studio in November 1985, followed by HBO/Time Inc. in December 1987. HBO transferred its venture shares to Columbia Pictures, which integrated Columbia and Tri-Star into the umbrella company Columbia Pictures Entertainment. (, TriStar operates exclusively as a film production arm of Sony Pictures Entertainment. Its television unit was merged with Columbia Pictures Television and joint venture studio Columbia TriStar Television in 2002 to form Sony Pictures Television).

Film production for the HBO television service commenced in 1983, through the formation of HBO Premiere Films, which was originally developed to produce original made-for-cable movies and miniseries with higher budgets and production values compared to other television films. The film division began producing original movies for the network in 1983 with the debut of The Terry Fox Story. Differing from most television films produced for cable television, most of the original movies produced by HBO have featured major film actors over the years, ranging from James Stewart to Michael Douglas. The unit—which would be rechristened HBO Pictures in 1984—expanded beyond its telefilm slate, which was scaled back, ventured into independent film production. When HBO Pictures was formed, HBO entered into a limited partnership with Thorn EMI to form Silver Screen Partners. The first L.P. of its kind to be developed for the financing of feature film production, Silver Screen released only seven films between 1983 and 1986—most of which were not commercial or critical successes, with the minor exception of the 1985 comedy film Volunteers.

A secondary internal film production unit, HBO Showcase, was created in 1986 to focus primarily around high-quality drama productions. One of its productions, 1989's Age Old Friends, became the unit's first film to earn Primetime Emmy Awards, respectively for Outstanding Lead Actor in a Miniseries or Movie (Hume Cronyn) and Outstanding Supporting Actor in a Miniseries or Movie (Vincent Gardenia). In January 1996, HBO Showcase was superseded by HBO NYC Productions, a New York-based studio focusing primarily on HBO original movies as well as occasional drama series productions for the network. Time Warner consolidated HBO Pictures and HBO NYC Productions into a singular unit, HBO Films, in October 1999; since then, the division has expanded into theatrical film productions distributed by sister company Warner Bros. Pictures and its subsidiaries, in addition to continuing to produce HBO's slate of original movies. In 1987, HBO entered into another limited partnership to create Cinema Plus L.P. The studios' most notable is a Silver Pictures co-production, Ricochet, with other titles including Mom and Dad Save the World, Switch and Don't Tell Mom the Babysitter's Dead. All of the films—none of which were critical or commercial successes—were released in 1991 and 1992, and were distributed by HBO sister company Warner Bros. Pictures.

Home Box Office, Inc. entered into television production outside of the flagship HBO channel in 1988, with the formation of HBO Downtown Productions. In addition to handling production of comedy specials for HBO, the channel produced program content for Comedy Central (such as Politically Incorrect with Bill Maher and Dr. Katz, Professional Therapist). A secondary television production unit, HBO Independent Productions (HIP), was formed in October 1990. The Los Angeles-based production company specialized in television series and specials for broadcast, cable and syndicated television as well as lower-budget theatrical films. Throughout its 16-year existince, HIP primarily produced sitcoms for broadcast television and basic cable networks (including Martin, Roc, The Ben Stiller Show and Everybody Loves Raymond).

Home video
During the early 1980s, HBO had an agreement deals with Vestron Video to distribute some of HBO's made-for-cable films (such as The Terry Fox Story). In November 1984, as the broader entertainment industry began to drop their objections to and begin releasing their films through the then-burgeoning home video marketplace, HBO signed a partnership with the home entertainment unit of Thorn EMI to form Thorn EMI/HBO Video to distribute independent films and HBO-produced programming. Thorn EMI signed distribution agreements with various mid-level and independent film production companies (such as Orion Pictures and New Line Cinema) that did not have their own home video units.

In August 1986, Cannon Films acquired Thorn EMI's interest in Thorn EMI/HBO Video, which Time Inc. subsequently renamed HBO/Cannon Video upon transferring partial ownership of the unit. HBO acquired Cannon's interest in the venture in April 1987, amid financial losses incurred by the film studio after an unsuccessful attempt at releasing a series of larger budget films that floundered in box office revenue; the unit was subsequently renamed HBO Video. Over time, HBO Video—which eventually became HBO Home Video in January 1994—shifted focus away from releasing films from independent studios to releasing HBO's catalog of original programs and films on DVD and Blu-ray Disc. In addition, HBO Video also entered into various licensing deals with distributors such as Congress Video, Goodtimes Home Video, and Video Treasure to distribute and re-issue HBO's content catalogs. The unit—renamed HBO Home Entertainment on September 5, 2009—transferred the manufacturing of physical product to Warner Home Video.

Expansion of television service
On April 1, 1986, HBO commenced test-marketing of a new mini-pay service, Festival, to six American Television and Communications Corporation systems. Festival was targeted at older cable subscribers who objected to violent and sexual content on other pay cable services, non-cable television viewers, and basic cable subscribers that had no existing premium service subscription. Festival ceased operations on December 31, 1988; HBO cited headend channel capacity limitations for the closure, as it prevented Festival from expanding its distribution.

On January 2, 1989, Selecciones en Español de HBO y Cinemax ("Spanish Selections from HBO and Cinemax"), a Spanish-language second audio program feed of HBO and Cinemax aimed mainly at Hispanic and Latino customers, was launched. The service—rebranded as HBO en Español on September 27, 1993—originally offered Spanish audio simulcasts of HBO's boxing telecasts, dubbed versions of American feature films and imported Spanish-language films, before eventually adding original scripted, documentary, family and magazine programs from HBO's library.

Time-Warner merger
On March 4, 1989, Warner Communications announced its intent to merge with Time Inc. for $14.9 billion in cash and stock. The merger underwent two unsuccessful efforts by Paramount Communications to have civil injunctions issued to block the merger, as Paramount was seeking to acquire Time in a hostile takeover bid. The Time Inc.-Warner Communications merger was completed on January 10, 1990, resulting in the consolidated entity creating Time Warner.

On November 15, 1989, Home Box Office, Inc. launched The Comedy Channel, a comedy-centered basic cable channel featuring clips excerpted from stand-up comedy sets, comedic feature films and television series. The Comedy Channel's programming model was similar to the original format of MTV (which, ironically, was launched under WarnerMedia predecessor Warner Communications and American Express's media joint venture, Warner–Amex Satellite Entertainment). Its competitor was Viacom-owned Ha!: The TV Comedy Network, another startup comedy-oriented cable channel that was formally announced after The Comedy Channel and debuted on April 1, 1990, focusing on reruns of older network sitcoms. Both channels experienced difficulties gaining sufficient cable distribution (both Ha! and The Comedy Channel each had fewer than 10 million subscribers), and struggled to turn a profit, making them "prohibitively expensive" to operate independently.

On December 18, 1989, Viacom and HBO reached an agreement to consolidate Ha! and The Comedy Channel into a single channel, CTV: The Comedy Network, which launched on April 1, 1991; its name was subsequently changed to Comedy Central on June 1 of that year, in order to limit confusion and potential trademark issues with the Canadian-based CTV Television Network. Time Warner/HBO exited the venture in April 2003, when Viacom bought out its 50% stake in Comedy Central for $1.23 billion. (, Comedy Central operates under the Domestic Media Networks unit of ViacomCBS.)

In 1993, HBO purchased post-theatrical distribution rights for 48 films in development from upstart production company Savoy Pictures (co-founded by Victor A. Kaufman and Lewis J. Korman). Savoy Pictures never generated success with any of its feature film releases, and eventually folded in 1997. In 2005, HBO Films and New Line Cinema formed Picturehouse, a worldwide theatrical distribution company for high-quality independent films. The company, along with sister studio Warner Independent Pictures, was shut down in May 2008 as part of the consolidation of New Line with its sister unit Warner Bros. Entertainment. (Picturehouse CEO Bob Berney would later resurrect the studio as an independent entity in 2013, after purchasing the trademark rights from Time Warner.)

On October 15, 2014, Home Box Office, Inc. announced it would launch an over-the-top (OTT) subscription streaming service in the United States in 2015, which would be marketed directly to cord cutters (consumers who primarily use streaming video services rather than watch television via a cable or satellite subscription) and competiting with services such as Netflix. HBO Now formally lauunched on April 7, 2015, initially retailing only to Apple TV and iOS devices under a three-month exclusivity agreement. The service is similar to HBO Go, a TV Everywhere streaming platform that launched on February 18, 2010, and is marketed exclusively to existing HBO linear subscribers through a television provider. Under WarnerMedia stewardship, the company announced on October 10, 2018, plans for a new OTT platform combining programming from HBO with content from various other WarnerMedia properties including the former Turner Broadcasting System's cable network and Warner Bros. Pictures and Television. The service—announced as HBO Max on July 9, 2019, and slated to operate under WarnerMedia Direct, making it one of two HBO-branded properties not to operate under the Home Box Office, Inc. umbrella—was developed under a separate infrastructure from HBO Go and HBO Now, which will continued to be sold, though existing subscribers would be offered to transfer subscriptions to HBO Max following its May 27, 2020 launch.

Acquisition by AT&T
On October 22, 2016, AT&T disclosed an offer to acquire Time Warner for $108.7 billion, including assumed debt held by the latter company. The merger would bring Time Warner's various media properties, including Home Box Office, Inc., under the same corporate umbrella as AT&T's telecommunications holdings, including satellite provider DirecTV and IPTV/broadband provider AT&T U-verse. Time Warner shareholders approved the merger on February 15, 2017.

On November 20, 2017, the U.S. Department of Justice filed a lawsuit against AT&T and Time Warner in an attempt to block the merger, citing antitrust concerns surrounding the transaction. U.S. clearance of the proposed merger—which had already received approval from European, Mexican, Chilean and Brazilian regulatory authorities—was affirmed by court ruling on June 12, 2018, after District of Columbia U.S. District Court Judge Richard J. Leon ruled in favor of AT&T, and dismissed antitrust claims asserted in the DOJ's lawsuit. The merger closed two days later on June 14, 2018, with Time Warner becoming a wholly owned subsidiary of AT&T, which renamed the unit WarnerMedia. The U.S. Court of Appeals in Washington unanimously upheld the lower court's ruling in favor of AT&T on February 26, 2019.

In August 2017, as part of their co-production deal with the studio, HBO and Sky acquired minority equity interests in British television production company Bad Wolf (producer of the HBO miniseries The Night Of).

On February 28, 2019, Richard Plepler stepped down from his position as CEO of Home Box Office, Inc., after a collective 27-year tenure at HBO and twelve years as head of the network and its parent unit. The New York Times reported that Plepler "found he had less autonomy after the merger." On March 4 of that year, AT&T announced a major reorganization of WarnerMedia's assets, dividing WarnerMedia's television properties among three corporate divisions. Home Box Office, Inc. (encompassing HBO, Cinemax, and their respective wholly owned international channels and streaming services) was reassigned to WarnerMedia Entertainment, placing it under the same umbrella as sister basic cable networks TBS, TNT and TruTV (which were formerly part of the dissolved Turner Broadcasting System subsidiary), and under the leadership of former NBC and Showtime executive Bob Greenblatt. (Other former Turner assets were split between two other new subsidiaries: WarnerMedia News & Sports, which oversees CNN and its sister networks, Turner Sports and management operations for NBA TV, and WarnerMedia Global Kids, Young Adults and Classics, a unit of Warner Bros. that oversees such networks as Cartoon Network and Turner Classic Movies.)

On May 8, 2019, as part of a broader reorganization that also brought HBO Enterprises and programming distribution for Turner Entertainment under the division, HBO parent WarnerMedia announced that HBO Home Entertainment would be transferred from Home Box Office, Inc./WarnerMedia Entertainment to Warner Bros. Worldwide Home Entertainment and Games.

Divested

 * Comedy Central – 50% with Viacom (1989–2004)
 * TriStar Pictures – joint venture with CBS and Columbia Pictures (1983–1986)

Dormant, transferred or shuttered

 * Festival (1986–1988)
 * HBO Home Entertainment (1984–2019; transferred to Warner Bros. Home Entertainment Group)
 * HBO Defined (India)
 * HBO Downtown Productions (1989–2001; pre-1992 library owned by HBO)
 * HBO Hits (India)
 * HBO Independent Productions (1990–2001)
 * HBO Netherlands – joint venture with Ziggo
 * HBO NYC Productions (1986–1999; formerly known as HBO Showcase, folded into HBO Films)
 * Take 2 (1979)