For Robert Durst, the gig may finally be up. For the legacy pay television model, the same is probably true.
This past Saturday, Louisiana state police officers and FBI agents arrested real estate heir Robert Durst in New Orleans on first-degree murder charges relating to the death 15 years ago of an acquaintance in Los Angeles.
That the 71-year-old Durst was surrounded in a Marriott hotel lobby by law enforcement officers is surprising mainly because he has managed to evade conviction for so long. Most of us, I’m terribly happy to observe, manage to weave our way through life’s travails without having to evade, dismiss, fend off or deny having had anything to do with the death or disappearance of people we knew. Not so with Durst, who has a peculiar habit of having been around when people close to him mysteriously have died or vanished.
This habit is described in great detail in HBO’s documentary, “The Jinx: The Life and Deaths of Robert Durst” the final episode of which was set to premier yesterday on HBO2.
Suggesting the work of HBO producers Marc Smerling and Andrew Jarecki led directly to Durst’s arrest probably exaggerates things. By like, a gnat’s whisker. In particular, as the New York Times reports, the discovery by the show’s producers of a potentially damning handwriting sample may have had special relevance to this weekend’s arrest.
I point this out because of what it says about HBO. The gripping Durst documentary is not a unique, one-off event. It is emblematic of the HBO brand at large. The Time Warner Inc. pay-TV network has a keen instinct for consistently bringing to television’s glass screens content that is relevant, provocative, outlandish, sublime, entertaining, surprising and talked-about. HBO commands the stage like no other television network, although many — FX may be closest right now — try.
Pay TV economics
This skill has translated over decades to enormous economic value creation that is intertwined with the very industry that gave HBO life: pay television. A former boss of mine, media industry valuation specialist Larry Gerbrandt, once wrote the most significant event in the history of pay television was not the deployment of signal traps in the 1970s or the onset of the multiplex concept in the 1990s, but instead HBO’s astonishing original television series “The Sopranos,” which redefined not only what Americans did on Sunday nights, but gave an enormous psychological and economic boost to the then-moribund pay television category.
While HBO itself has singularly produced enormous economic success — its revenue amounted to $4.9 billion in 2014 — the larger impact has been on the broader pay television category. Ever since its inception HBO has served as a sort of super-powered electrical magnet that pulls money through the pay television system like iron through sand. The way it has always worked is that if you wanted HBO — if you wanted to watch Tony Soprano or “Six Feet Under” or “Girls” or marquee boxing events — you had to buy your way through requisite underlying packages of television channels, spending, depending on the decade, $20 or $30 or $50 a month on the chaff to get to the wheat. HBO was the toy in the Cracker Jack box. Getting to it meant eating your way through more gooey junk than you probably really should have. But you did it, because you really wanted that prize.
Of course, that’s now changing. HBO’s creation of HBO Now, a $15-per-month standalone variation sold by Apple Inc. and, soon, other Internet video purveyors, changes everything, but in particular explodes the “buy-through” model that has long sustained the cable and satellite and telco-video sectors. Providers in this camp like to talk up the vast bundles of channels they offer and will, to the death, defend this bundled model as the only economically principled approach to showering the land with the choice of video content a nation of couch-sitters deserves. The industry’s stern and studied and fist-hammering-on-table objection to “a la carte” content delivery has on occasion approached a fever pitch that is comical. It has always been balderdash, but preaching from on high the notion that bundled delivery provokes diversity and affordability at least has given cover to the otherwise unjustifiable practice of forcing people to buy stuff they don’t want to get what they do.
Except now the argument’s folly is exposed by the very channel that has powered the pay TV industry since pretty much all time. Or at least from the opening scene of “Sometimes a Great Notion,” the (in my opinion) under-rated 1971 movie, originally titled “Never Give an Inch” that was the first to be televised, commercial-free and all, by a newly born HBO in November of 1972.
HBO’s willingness to defy this longstanding convention, to go out there naked and alone, creates what I think are almost impossible odds for followers, and may set into motion a convulsive and damaging period of economic decline for the television industry at large. Three ingredients combine to produce this brewing catastrophe:
First, this is HBO we’re talking about. Apologies to CBS and Les Moonves here, but it’s relatively easy to dismiss other recent over-the-top entrants. CBS’s All Access online video service, which amalgamates content from CBS into a $5.99-per-month on-demand video offering, reminds me of mistakes made by the recorded music industry during the early stage forays into online delivery. Universal Music, for instance, conceived of and launched in 2003 an online platform that offered users wide access to…wait for it…Artists Who Recorded for Universal. Like, umm…well…let’s see…there was…I’m thinking…hold on…shoot. I actually can’t recall any. Not because Universal didn’t have talent on its roster (Sheryl Crow, Dr. Dre, U2, Stevie Wonder were among the list), but because NOBODY THOUGHT ABOUT MUSIC THAT WAY. There was no special brand or identifiable genre expertise going on here. It was a corporation’s self-serving vision of how to organize and present content. CBS? Same thing. If you can name three television shows that scream “CBS” you’re doing better than me. HBO? You and I can rattle off a dozen. We can play word association all day long. I say “Game of Thrones.” You say “HBO.” I say “True Detective.” You say “HBO.” I say “Girls….” You get the picture.
Second, the price point. $15 a month for television’s best network. You can imagine the trembling this evokes across TV-land. I suspect rival networks had hoped for something loftier. HBO, too, probably has a spreadsheet model somewhere showing an “aggressive” pricing model that’s more emblematic of what people really pay to get HBO, which, buy-through and all, is closer to $70 a month than $15. But $15 it is. If HBO is worth $15 a month, what’s VH1 worth? (Just asking.) What’s Fine Living worth? USA Network? (Ouch! That one hurt.)
Finally, the history. For going on 10 years now I’ve listened to television industry executives proclaim they’re not going to repeat the mistakes of the music industry, which unbundled its songs-on-CDs model to the utter delight of music fans and the utter decimation of the recording industry. Music industry revenues, recall, were halved 10 years after the introduction of iTunes, to roughly $7 billion in 2013 from $14 billion in 2004.
How television attempts to avoid the same fate, now that the a la carte cat is out of the bag, will be fascinating to watch. As an Apple TV user, I’ve watched over the last two years the list of video applications appearing on my screen begin to multiply, from a handful of brands to something that, if you squint a bit, starts to resemble a traditional cable-esque channel lineup, but one where you get to pick-and-choose what to pay for. Many of these brands are at least for the moment guarded by the digital chastity belt that is “authentication,” or the need to prove that you are a card-carrying bundled-television subscriber. (Does anybody else channel the “Please sir, I want some more” moment from Oliver Twist here?) The thing is, HBO is now showing the world a different path, one where the only authentication requirements are a credit card number, a broadband connection and a device. That’s, I think, where this world is going. In it, I hope HBO continues to thrive.
Stewart Schley writes about media, technology and other subjects from Denver and New Zealand.