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November 8, 1972
- Home Box Office launched at 7:30 p.m. Eastern Time on November 8, 1972, initially available to subscribers of Teleservice Cable (now Service Electric Cable TV and Communications) in Wilkes-Barre, Pennsylvania.
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On February 28, 1973, Sterling Communications announced it would spin-out HBO and associated assets into Home Box Office, Inc., a new subsidiary created in accordance with the sale of 9% of Sterling's HBO equity to Time Inc. (expanding its controlling shares to around 75% of HBO's equity) and a $3-million direct investment.
- US$5.890 billion (2016)
On February 28, 1973, Sterling Communications announced it would spin-out HBO and associated assets into a new subsidiary, Home Box Office, Inc. Time Inc. received 9% of Sterling's HBO equity (expanding the former's controlling HBO shares to around 75% of its equity) and committed a $3-million direct investment in the subsidiary.
- Overview
- History
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- References
- External links
Home Box Office, Inc. (HBO) is an American multinational media and entertainment company operating as a unit of Warner Bros. Discovery US Networks Group.
Founded by Charles Dolan and based out of WarnerMedia's corporate headquarters at the 30 Hudson Yards complex in the West Side of Manhattan, its main properties include its namesake pay television network Home Box Office (HBO), sister service Cinemax, HBO Films, and the international HBO Go streaming service. (A secondary HBO-branded service, HBO Max, is operated under sister subsidiary Warner Bros. Discovery Global Streaming and Interactive Entertainment, which shares principal management with Home Box Office, Inc.) It has also licensed or maintained ownership interests in international versions of HBO and Cinemax, most of which are managed by Home Box Office, Inc. through sister division Warner Bros. Discovery International.
Origins as Sterling Communications
Home Box Office, Inc.'s origins trace to December 1, 1965, when Charles Dolan—who had already done pioneering work in the commercial use of cables—was granted a franchise permit by the New York City Council to build a cable television system encompassing the Lower Manhattan section of New York City (traversing southward from 79th Street on the Upper East Side to 86th Street on the Upper West Side). Along with Dolan, TelePrompTer Corporation (which was assigned most of Upper Manhattan) and CATV Enterprises Inc. (which was assigned part of the city's Upper West Side, extending north of the Harlem River, and The Bronx's Riverdale neighborhood) were also awarded cable franchise permits on that date. Dolan's maiden television venture was Teleguide, a closed-circuit television system started by his initial company, Sterling Movies U.S.A., in June 1962; it distributed a schedule of tourist information, news, interview segments and feature interstitials to hotels, and by 1964, apartment buildings and office buildings in the New York metropolitan area. Through Dolan's Sterling Information Services subsidiary, Manhattan Cable TV Services began limited cable service in September 1966. Manhattan Cable (renamed Sterling Manhattan Cable Television in January 1971) was the first urban underground cable television system to operate in the United States. Rather than string up cable on telephone poles or use microwave antennas to receive the signals, Sterling had laid new cable lines beneath the streets of and into buildings throughout Manhattan, and repurposed Teleguide's existing cable infrastructure for use by the new operation. Sterling's use of underground cables complied with a longstanding New York City Council ordinance—originally implemented to prevent broad-scale telephone and telegraph outages, after a severe blizzard affecting the Northeastern United States in March 1888 had caused widespread damage to above-ground utility lines in the area—requiring all electrical and telecommunication wiring to be laid underground to limit weather-related service disruptions, and because the multitude of tall buildings on Manhattan Island subjected television signals to reception impairments. Dolan curried the financial backing of Time-Life, Inc. (then the book publishing unit of Time Inc.), resulting in Manhattan Cable becoming one of its first cable system properties. Despite the investments from Time-Life's share of Sterling (initially 20% at the beginning of operations), Sterling Manhattan consistently lost money throughout its first six years of operation; the company incurred much of its debt from underground wiring expenses (costing as much as $300,000 per mile), and its difficulties attracting new subscribers to generate income (Manhattan Cable managed to receive only around 400 customers by 1967). On August 27, 1969, Sterling Communications consolidated ownership of the cable assets: it acquired Time-Life's 49% share in Sterling Manhattan, in exchange for stock and other assets worth $1.84 million. (Time-Life's interest in Sterling Communications concurrently increased from 25% to 44.5%.) Dolan was looking for a way to help his struggling cable company grow to become financially viable. In the summer of 1971, during a family vacation to France aboard the Queen Elizabeth 2, Dolan conceived "The Green Channel", a codenamed concept for a cable-originated television channel that would be distributed via Sterling Manhattan and other participating cable systems. The proposed service would offer unedited theatrical movies licensed from the major Hollywood film studios and live sporting events, all presented without interruptions by advertising and sold for a flat monthly fee to prospective subscribers. Dolan wanted to offset the service's start-up costs by having Sterling enter into carriage agreements with other cable television providers to transmit and sell the service to their customers, and draw revenue from fees charged to subscribers who added the channel onto their existing cable service (which then consisted exclusively of local and imported broadcast stations). Dolan later presented his idea to management at Time-Life, who, despite the potential benefit to the company's cable assets, were initially hesitant to consider the "Green Channel" proposal. In the early 1970s, the cable television industry was not very profitable, and was under constant scrutiny from FCC regulators and the major broadcast television networks (CBS, NBC and ABC), who saw cable as a threat to their viability. Attempts to launch pay television services had been done on an experimental basis in the United States dating to 1951 (among them, Phonevision in New York City, Chicago and Hartford; SubscriberVision in New York City; Telemeter in Palm Springs, California; and Telemovies in Bartlesville, Oklahoma) with little to no success, muzzled by campaigns backed by movie theater chains and commercial broadcasters to assuage television viewers to the supposed threat of pay television to the movie industry and free-to-air television access, limited user interest, and FCC restrictions on the types of programming that could be offered to subscription services. Undeterred, Dolan managed to persuade Time-Life to assist him in backing the project. After the Federal Communications Commission ruled that local governments could not restrict the operation of subscription television services in cable franchise terms, in July 1971, Sterling Communications—now consisting of Sterling Manhattan; its Long Island-based sister system, Sterling Nassau Cable Television; production firm Allegro Films; and direct-to-cable programming firm Television Presentations Inc.—informed the FCC that it planned to operate a cable-originated pay television service. Because Sterling's New York City Council franchise grant specifically required FCC approval for that purpose, Time/Sterling filed an FCC request to authorize pay television operations. Sterling indicated that a subscription television operation would also help Sterling Manhattan fund its fledgling local origination channel, which had incurred $1 million in start-up debt on top of annual company operating losses of $250,000. On September 10, 1971, the FCC gave preemptive authorization to Time-Life and Sterling Manhattan Cable to begin a pay television operation. On November 2, 1971, Time Inc.'s board of directors approved the "Green Channel" proposal, agreeing to give Dolan a $150,000 development grant for the project.
Early history; dissolution of Sterling
The namesake Home Box Office (HBO) pay television network was founded by Dolan—as a joint venture between Sterling Communications and its co-partner, Time Life Broadcast Inc.—in 1972. The service—originally to have been called the "Sterling Cable Network", before Dolan and his development team settled on naming it "Home Box Office", originally intended as a placeholder name to meet publishing deadlines for the service's announcement memorandum and research brochures—launched on November 8, 1972, over Teleservice Cable (now Service Electric)'s Wilkes-Barre, Pennsylvania, system. Time Life originally planned for HBO to debut on a Teleservice system in Allentown, 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 (specifically those featuring the Philadelphia 76ers, with which HBO was unable to materialize a television agreement to accompany its planned broadcasts of New York Knicks games) that were scheduled to air on the service. Programming on HBO initially consisted of theatrical films and event programming (much of which was sourced to the service through an agreement with Madison Square Garden that dated to 1969, and was extended to allow regional broadcasts one week before HBO launched), arranged in the form of a double feature, or a single movie presentation paired with either a sports or special event (often bridged by a short film or other interstitial content); by 1974, when the service began offering programming during the l concert specials and other music programs, daytime children's programs and various instructional series were added to the schedule. Originally headquartered from the Time-Life Building on Avenue of the Americas (Sixth Avenue) in Midtown Manhattan, HBO initially relayed its programming via a network of microwave relay towers throughout the Northeastern United States to participating cable systems carrying the channel; On February 28, 1973, Sterling Communications announced it would spin-out HBO and associated assets into Home Box Office, Inc., a new subsidiary created in accordance with the sale of 9% of Sterling's HBO equity to Time Inc. (expanding its controlling shares to around 75% of HBO's equity) and a $3-million direct investment. Sterling also raised Time's equity in the company to 66.4% in exchange for the added HBO stake, through the purchase of additional stock and a converted $6.4-million note obligation. Dolan—who reportedly had major disagreements with Time-Life management on policy issues, claims which the company denied—subsequently resigned as chief executive officer of Sterling Communications and Home Box Office, accepting a $675,000 buyout of a portion of his stock while remaining on the board of directors at both companies in the interim; Dolan used portions of the sale's proceeds to repurchase Time's share of the Sterling Nassau systems and to start the Long Island Cable Community Development Co. (the forerunner to Cablevision Systems Corporation, that would be combined with the Sterling/Cablevision systems on Long Island) as the system's parent company. Gerald M. Levin—an entertainment industry attorney previously with New York City-based law firm Simpson Thacher & Bartlett, who had been with Home Box Office since it began operations as its director of finance, and later as its vice president and director of programming—replaced Dolan as the company's president and CEO; by September, he was joined by Time Life vice president J. Richard Munro as chairman of Home Box Office as well as Time-Life Broadcast's other subsidiaries, Manhattan Cable Television and NBC affiliate WOTV (now WOOD-TV) in Grand Rapids, Michigan (which became the company's lone conventional broadcasting property, after Time sold its other broadcast television properties as it began expanding into cable system ownership). On May 9, 1973, reportedly because of high start-up and operating costs for HBO and other Sterling cable assets, Time announced it would sell its controlling share of Sterling to Warner Communications for $20 million. Time intended to convert the 260,000 convertible notes it held in Warner's cable television unit, Warner Cable Communications, into common stock shares totaling up to 20% in interest. Sterling would then maintain oversight of Home Box Office under Warner's purview. The Time-Warner cable deal was terminated on June 27, after both companies failed to reach a definitive agreement to sell HBO and the other Sterling subsidiaries to Warner; financial arrangements made between Sterling and the New York City Council as part of their 20-year noncompete franchise agreement were alleged to have curtailed the sale. On July 19, 1973, Time Inc. reached an agreement to purchase and assume financial liabilities of Sterling Communications for $6.2 million (including $3.1‐million in redeemed public debentures). Time completed its acquisition of Sterling on September 18, 1973, formally dissolving the Sterling holding company and transferring Home Box Office and Sterling Manhattan Cable to its Time-Life division. The "Sterling" name was subsequently removed from the Manhattan and Long Island systems, with the Manhattan unit being renamed "Manhattan Cable Television". (Time's purchase of Sterling was the subject of a $97-million class action lawsuit filed in the U.S. District Court for the Southern District of New York on November 28, 1973, by 15 former Sterling stockholders who accused Time and its corporate board of "conspiracy" to depress the value of Sterling stock in order to "force" the sale at below market value "far less than its true value.") As the acquisition was being completed, the service had struggled to grow to complete viability: by October, it had around 8,000 subscribers and was carried on 13 cable systems in Pennsylvania and southern New York State with a combined 110,095 subscribers, and it was suffering from a significant churn rate as subscribers who found the channel's program scheduling repetitive, because of the limited allotment of movies outside of special events, decided to cancel their service. On April 11, 1975, Levin and Time-Life unveiled plans to distribute the HBO signal via satellite under a transponder leasing agreement with RCA Americom Communications, intending to distribute its programming to cable systems and multipoint distribution services throughout the United States. Levin reached an agreement to distribute the HBO satellite feed on eight UA-Columbia Cablevision systems in California, Texas, Florida, Arizona, Arkansas and Washington State, and build earth station receivers to intercept and relay the signal to the UA-Columbia systems' headends. HBO also signed a $7.5-million agreement (including $6.5 million allocated by Levin) with RCA Americom to lease a transponder on the then-under construction Satcom I, which was expected to be launched at the end of 1975, for a five-year term. Cable television equipment manufacturer Scientific Atlanta (through a client arrangement with Transcommunications Corp.) also intended to build earth-based satellite transmitting stations for setup outside of HBO's Manhattan headquarters and at the headend sites of the client cable systems that reached agreements to receive the signal ahead of the satellite launch. 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. The service temporarily retransmitted its signal from transponder on Westar 1 for the first three months of satellite transmissions, before switching to Satcom I when that satellite commenced commercial operations on February 1, 1976. 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 independent station 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, pioneering the "superstation" concept (non-network-affiliated television stations that transmit on a regional or national basis primarily through cable). 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. In May 1976, Gerald Levin was promoted to chairman and CEO of Home Box Office Inc., succeeded as company president by Manhattan Cable president Nicholas "N.J." Nicholas Jr.
Early expansion; challenges to indecency statutes
As the HBO television service was growing nationally, Time-Life tried to develop companion pay services to sell to prospective subscribers, including existing HBO customers. Home Box Office's first attempt at 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 a slow subscriber and carriage growth, forcing Time-Life to shut down the channel in May 1980. HBO executives then decided to develop a lower-cost "maxi-pay" service: on May 18, 1980, Home Box Office Inc. announced during that year's National Cable Television Association Convention its plans to launch Cinemax, 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) initially focused on movies chosen for their appeal to select audience demographics. Cinemax was designed to complement HBO (designated as a higher-tier "foundation [premium] service"), and avoid difficulties associated with bundling multiple "foundation" pay services. Cinemax launched over 56 cable systems in the Eastern and Central Time Zones on August 1, 1980. (A West Coast feed for the Pacific and Mountain Time Zones launched on September 1.) Compared to Take 2, Cinemax experienced far greater success because it relied on classic feature films from the 1930s 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 a then-emerging slate of original action series, and was removed entirely from Home Box Office's linear and on-demand platforms in 2018. The 1980s also saw HBO join three separate lawsuits concerning municipal and state-level statutes that would have legally prohibited cable systems from transmitting "indecent" content—specifically, programs that featured descriptions of or depicted "illicit" sexual acts and/or nudity—which Home Box Office Inc. and cable systems that challenged the laws saw as overbroad and in violation of the First Amendment, and would have precluded HBO and other pay television networks from airing programs containing material that may be considered inappropriate. Two of these involved statutes in Utah: HBO and four Utah cable systems sought a permanent injunction to a 1981 statute passed by the Utah State Legislature to restrict indecent cable program content, which was granted by the U.S. District Court for the District of Utah Judge Bruce S. Jenkins on November 17, 1981; the statute was declared unconstitutional as a violation of the First and 14th Amendments in a separate ruling by Jenkins on January 13, 1982. A second attempt at addressing obscene cable programming, the Cable Television Programming Decency Act, was declared unconstitutional on First Amendment grounds by Utah District Court Senior District Judge Aldon J. Anderson on April 10, 1985, in a case filed by HBO, Community Television of Utah and several viewer groups; a modified form of the statute was ruled as a violation of the First Amendment by the Eleventh Circuit Court of Appeals on September 10, 1985, and affirmed as unconstitutional by the U.S. Supreme Court on March 23, 1987, formally asserting that the subscriber-based model of cable television precluded programming content from being regulated in the same manner as broadcast television. A separate city ordinance in Miami that would have allowed the revocation of Miami Cablevision (now operated by Comcast)'s franchise license for carrying programs that the city manager deemed "obscene or indecent" was struck down by Judge William Hoeveler of the U.S. District Court for the Southern District of Florida on August 3, 1983, on the grounds outlined in Jenkins' ruling, and affirmed by the U.S. Court of Appeals for the Eleventh Circuit on April 10, 1985. On September 27, 1984, Home Box Office Inc. announced it would acquire a 15% equity share in Black Entertainment Television (BET), which would be accumulated under a "contribution" arrangement in which BET will stop paying a monthly lease to the transponder that HBO had then leased to BET until the accumulated lease amount matches what the latter would have paid fellow minority shareholders Taft Television & Radio Company and Tele-Communications Inc. BET repurchased all of Time Warner's stock in April 1996 in a $58-million transaction. In 1985, the operations of Home Box Office Inc. were relocated to facilities on West 42nd Street and Sixth Avenue in the Bryant Park district of Midtown Manhattan.
Current
•HBO •HBO2 •HBO Signature •HBO Family •HBO Kids •HBO Comedy •HBO Zone (U.S. only) •HBO Latino (U.S. only) •HBO International (managed through Warner Bros. Discovery International) •HBO Latin America •HBO Brasil •HBO Caribbean •HBO Asia •HBO Family •HBO Hits •HBO Signature •HBO Europe •HBO Europe Original Programming Ltd. (producer of several local original scripted programming and series based on licensed formats for Central and Eastern Europe, based in London, England, United Kingdom) •HBO 3 •HBO Go (international streaming service) •Cinemax •MoreMax (U.S. only) •ActionMax (U.S. only) •ThrillerMax (U.S. only) •MovieMax (U.S. only) •Cinemáx (U.S. only; Spanish language simulcast feed of primary Cinemax channel) •5StarMax (U.S. only) •Cinemax on Demand •Cinemax (Asia) (managed through WarnerMedia International) •Cinemax 2 (Central Europe) (managed through WarnerMedia International) •HBO Bulk (formerly HBO Direct) – sales distributor for hospitality properties, colleges and apartments •HBO Films •HBO Documentary Films •Bad Wolf Ltd – television production company (minority stake, operated with Sky)[149]
1."Sterling Expands" (December 18, 1972).
2.Lauren Feiner (March 4, 2019). "Layoffs expected as WarnerMedia reorganizes its leadership team after AT&T acquisition". CNBC. NBCUniversal News Group. Retrieved May 21, 2019.
3."WarnerMedia announces restructuring in wake of AT&T takeover". CNN. March 4, 2019. Retrieved May 21, 2019.
4."Time Warner Inc. Reports Fourth-Quarter and Full-Year 2016 Results". Time Warner (February 8, 2017).
5.[htt://hbo.com/contact]
6."New York City gives CATV grants" (December 6, 1965).
•HBO Bulk website (bulk property, college and hotel sales)
•Home Box Office at the Internet Movie Database
Nov 23, 2021 · In 1972, a channel named Home Box Office debuted, reaching fewer than 400 homes in Pennsylvania. HBO would go on to air groundbreaking hits like "Game Of Thrones" and "The Sopranos." And a new...
- Eric Deggans
Home Box Office was founded by Time Inc. in 1972 to offer cable television service. As a subsidiary of Time, HBO bought the rights to recent films and transmitted them to local systems via satellite and microwave relays.
May 24, 2023 · Getting used to a new name for HBO (Home Box Office) upon the channel launching its streaming service was OK for most of us. In 2010, when internet streaming became a thing, HBO became HBO Go. Then, after a brief period when the service was known as HBO Now, it became HBO Max. Article continues below advertisement.
Nov 8, 2022 · On November 8, 1972, the Home Box Office was born, and television was changed forever. To celebrate the network’s 50th birthday, The Ringer hereby dubs today “HBO Day.” This past summer,...
