Subscription as Artistic Service: Autonomy On Demand at HBO and Netflix

Posted by Owen Matson, Ph.D. on April 3
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Working with HBO was an opportunity to experience creative freedom and 'long-form development' that filmmakers didn't have a chance to do before the emergence of shows like The Sopranos.

 —Martin Scorsese            

Subscription Service and the Importance of Risk Taking

Martin Scorcese is not alone in his opinion that HBO offers an "opportunity to experience creative freedom."   References to creative freedom and idependence have become hallmarks of HBO's brand identity. Less aknowledged, however, is the business model that supports this freedom.  At its core, HBO's capacity to provide "an experience of creative freedom" reflects the autonomy of a subsrciption-based business model that enables independence from external commercial funding.  

HBO has capitalized on the value of this independence by transforming it into a purposeful narrative. Subscription service does not simply enable HBO's independence. More importantly, by freeing the company from dependence on commerical sponsorship, subscription service provides HBO with the structural conditions necessary to support a heroic brand identity built on a quintessentially American mythos: The rule breaking, unapologetically independent individualist who challenges established cultural conventions in the name of personal freedom.  For the sake of brevity, we can refer to this mythos as HBO's "independent brand."  

Built on the benefits of subscription service, HBO's "independent brand" disrupts established practices and perceptions on multiple levels:

1. Industry Conventions: HBO's independent brand disrupts traditional industry distinctions between television and cinema. 

2. Cultural Traditions: HBO's independent brand disrupts traditional cultural oppositions between "high-brow" art and "low-brow" popular, "mass" entertainment.

3. Work Culture: For employees, HBO's independent brand disrupts the sterotypical image of a corporate work culture (one ironically lampooned in shows like The Office), in which employees are traditionally perceived to suffer under an oppressive regime of enforced consenus and group think. In contrast, as expressed by employees, HBO's brand offers a distinctly purpose-driven corporate culture that situates employees as protagonists in a cultural battle for individual expression and creative freedom.  The power of what I'm calling HBO's "independent brand" underscores the internal value of brand identity: Often viewed as the external perceptions of consumers, brands also operate internally to inform employee perceptions of company values. These perceptions in turn motivate employee performance by appealling to individual passions and a commitment to mission-driven company values.

4. Viewer Experience: Externally, the values of HBO's independent brand disrupts the stereotypical notion of a "mass audience"--the calumny of the popular viewer as anonymous member of the "mindless masses." Offerened as both entertainment and high art, HBO's programming provides a more exclusively "artistic" viewer experience that appeals to values of independence and the anti-commerical sentiments associated traditional television.   As it does for employees at HBO, the independent brand situates viewers as heroic protagonists in an implied "movement" for the value of creative expression. Viewing HBO becomes more than a passive act of consumption; rather, owned as a "subscribed" service, viewership operates as an active pratice.  Like supporting a political candidate, subscribing to and watching HBO doubles as an expression of viewer values.  Framed in the context of HBO's "independent brand," subscribing to the service means more than access to entertainment; rather, subscription means participation in a campaign commited to the values of individualism and creative expression.

5. Critical Acclaim: By disrupting traditional conventions of television programming, HBO has attracted ongoing acclaim from independent cultural criticsVariety Magazine links HBO’s success to its status as “a genre-defining global programming brand.” And the company’s critical success has been canonized by its record-breaking, 16-year-Emmy run for producing great programs that tell sophisticated stories. Seen within the context of the entertainment industry, HBO is arguably the most critically successful producer of television programming in the history of the medium. More importantly, indedepent critical acclaim serves as social proof that confirms the authenticity and authority of HBO's independent brand.

6. Artist Appeal: HBO's independent brand attracts the support of high-profile artists--writers, actors, and directors--artists who would otherwise avoid the creative restrictions of television as commerically-driven medium.

As I will explore further, all 6 of these fronts mutually reinforce one another.  The authority of HBO's independent brand reflect the power of the transition from commerical sponsorship to subscription-based services.

Subscription Service and HBO as Cinema for Television

The very name "HBO" self-consciously frames the distinction between subscription and commerically supported programming as a distinction between cinema and television. HBO’s tag line, “It’s Not TV. It’s HBO,” references the cinema box office--"HBO" means "Home Box Office"--and draws a stark contrast with traditional network television’s default strategy of pursuing "least objectional programming" (LOP). Since the 1990s, emergent digital and satellite technologies have gradually disrupted the era of network dominance in America and promoted global television markets. Multi-channeling and streamed  programming have fundamentally shifted the focus of markets from mass entertainment to the more specific interests of viewer-centered “micro” cultures. In niche markets, television is no longer simply a regular broadcast medium, but offers “appointment viewing” on a variety of platforms, enabling audiences to select entertainment according to personal tastes and schedules. Industry economics in a competitive, multi-channel environment happily resonate with a demand for distinctive products, as opposed to LOP for the masses.

Simply put, HBO’s success lies in a business model that actively supports creative autonomy and risk-taking.  In 2013, during an interview for the Creativity Conference (presented by the Motion Picture Association of America (MPAA), Microsoft and TIME), Richard Plelpler, CEO of HBO, said that the business executive's role is to "nurture" artistic genius.  And for Plelpler, independence from outside sponsors plays a critical part in this mission.  Historically, the production of mass entertainment has often depended on sources of financial investment external to the creative process. HBO’s business model supports innovation by removing the outside investors who tend to limit the necessary tolerance for risk. For HBO, profiting on sophisticated, creative work has involved doing away with commercially sponsored entertainment: The classic television model in which shows are “brought to you by” whichever sponsoring companies run commercials in the middle of a particular program or episode.

Subscription Service Enables HBO to Challenges Cultural Distinction between High and Low Art

There is good reason to be wary of any attempt to present a definitive standard of artistic greatness.  It's not only because the question of "great art" has concerned aestheticians for centuries. The very question presumes that values of artsistic greatest are universal and that quality art is “timeless”—the same through time and across space. Standards of “artistic greatness” are always a mix of personal idiosyncrasy and culturally situated contexts.  Any question of greatness must begin with the awareness that values and evaluation have a history; evaluations of artistic greatness presume criteria that reflect cultural conventions specific to a particular time and place.

At the same time, powerful art can also challenge cultural conventions. While avoidng naive generalizations, we can venture some careful account of aesthetic value as informed by an understanding of the historical contexts that inform the criteria for these evaluations.  A tentative and personal response to the question of HBO’s value would be that the company’s programs are capable of raising our thoughts and observations above an immersion in the everyday and familiar, and in doing so they can compel us to reassess and reshape the significance of our conventional views—and they can do this repeatedly over time. As valuable artworks, the programs exhibit endurance and flexibility, providing the viewer with the potential for active discovery and ongoing reflection.

Television, of course, has a long and deep reputation for providing “lowbrow” entertainment: “Unsophisticated” LOP designed for mass consumption and thus mass appeal. That said, many have challenged the very opposition between “high” and “low” art as itself a rather suspect, elitist, and at-best artificial distinction.   

History is in fact rich in examples that challenge the tendency to see “great art” as simply unpopular and thus commercially unviable. Shakespeare was very popular. So were Charles Dickens and Mark Twain. In fact, most of what we now designate as “classic literature” wMoby-Dick-Herman-Melvilleas also very popular literature. Certainly, there are exceptions.  In the mid 19th century, Herman Melville, now considered among the greatest authors in U.S. history, was considerably less than successful in the popular marketplace. His Moby Dick—now considered a masterpiece—was a commercial failure, and was in fact almost completely forgotten until re-discovered in the 1920s, long after the author’s death.  However, the myth of the “classic artist/writer" figure whose genius goes unappreciated by popular adudiences is, generally speaking, more often the exception, not the rule. In the 1950s—when even the titles of television programs often contained the name of company sponsors—playwrights like Paddy Chayefsky managed to create what many consider high-end, artistically sophisticated classics of television’s golden age. 

Still, even authors who managed to write sophisticated programming for television often did so in a system that required negotiating the rules and limitations set by the investors who sponsored this programming.  However accurate or inaccurate the perception may be, there are nevertheless many tb-ta.gifvery real reasons why television has gained a reputation as lacking artistic value.   The perceived opposition between art and popular commercial entertainment extends back to well before the rise of the television industry. Some locate the distinction between “art” and mass entertainment to the rise of industrialization, when mass production technologies enabled the large-scale, low-cost production of popular “dime novels, ”a lineage of formulaic fictions that includes popular romance and westerns, "pulp" detective fiction, science fiction like Edgar Rice Burroughs’ tales of John Carter on Mars, and adventure fiction like Burroughs’ popular Tarzan novels. Written for cheap, easy reading and Dime-Novel Western.jpgentertainment, the popularity of dime novels meant reliable, scalable profit for publishers.

While the tendency to see mass entertainment as the antithesis to “great art” has a long and complex history, there are, I think, three central and interrelated assumptions that inform this perception:

  1. “Great art” requires specialized, time-intensive, and thus costly labor. Mass entertainment, on the other hand, can be produced on a mass scale, according to formulas that make it reproducible without a specialized or highly trained labor force. The above-mentioned “dime novel” could be produced fast and cheap, by a much broader segment of the labor force. And lower production costs meant higher profits for publishers.
  1. “Great art” is perceived as hard work. And, as hard work, art presents a range of challenges: In addition to requiring more expensive labor, “great art" is often (problematically) presumed to be inaccessible to general audiences, difficult to understand.  Common perceptions of "art" suggest that, even when understood, it tends to challenge conventional beliefs and morals and thus forces audiences to question establsihed views. Such questioning can be stressful: Questioning one’s views involves a dimension of uncertainty in how one sees the world.
  1. Stress does not sell.  If “great art” is laborious and stressful, then it fundamentally runs counter to the primary purpose of mass entertainment, which is supposed to provide a distraction, an escape, from the stress of work and life.

StarWarsPoster-.jpgSimply put, there is a tendency to see “great art” as costly, difficult, and unpopular. These are, to put it mildly, problematic assumptions.  For one, they tend to presume a reductively narrow view of audience appeal. The issue here is not that these perceptions are true; rather, as perceptions, they have real effects--expecially for those who invest in and finance artistic productions.  The demand for profit—and fear of profit loss—makes commercial publishers and sponsors notoriously adverse to risk. Ironically, while success in many industries is known to depend on innovation, when it comes to entertainment, fear of risk is often an obstacle to creative innovation. Many investors tend to stick with known quantities—products they know will make money. This is one of the reasons why producers love to make movie sequels: The success of the first film tends to lower the risk involved in the success of the second. In the late 1970s, producers were apparently very nervous about the success and profit potential of Star Wars, but it’s popularity led to a long line of battlestar galacticasuccessors—not just the long line of Star Wars sequels, but stylistic inheritors like Battlestar Galactica. Again, there may be exceptions here, but the overall trend testifies to the ways in which concerns about profit often run counter to commercial investment in risky, innovative storytelling.  

The lesson here is that, while too-often misperceived as "risky" by sponsors, creative innovation in entertainment, as in other industries, generally does lead to profitable products. HBO’s capacity to produce sophisticated stories that also generate profit suggests that material considered “high art” does indeed possess rich market potential. The challenge lies less in the problems (i.e., cost, difficulty, and thus unpopularity) so commonly associated with complex, innovative programming. Rather, HBO’s success suggests that the challenge of profiting on sophisticated storytelling has more to do with the business models involved in the production of popular entertainment.

Subscription Service and Freedom from Commercial Sponsorship

For producers of creative work, outside sponsorship leads to financial dependence on industries external to entertainment itself. Instead of worrying about producing creatively sophisticated television programs, producers must worry about creating programs that help sell products like dishwashing detergent, chocolate milk, and antacids. The shift to subscription cable means producers no longer need to depend on the risk-averse concerns of outside investors. Rather, fees from subscribing viewers create a more immediate source of funding that can be freely invested into creating material directly for paying audiences, not for the audiences who are buying dishwashing detergent. Simply put, cable subscription leads to a new form of creative independence.

More importantly, the benefits of this financial independence extend far beyond freedom from the interests and creative restrictions of commercial sponsors. Financial independence does not simply expand the options and variety of HBO’s program offerings. Rather, newfound notions of freedom and independence energize work cultures. Creative autonomy informs the narratives that shape how employees see the very meaning of their work, cultivating a sense purpose that enhances the quality and creativity of the programming itself.

HBO's Independent Brand Creates a Purpose-Driven Internal Work Culture 

Consider the narratives of the executives and the artists who work for HBO. In a 2010 interview for Variety Magazine, Sue Naegle, HBO’s President of Entertainment, said that the company wants “to give… viewers an experience they can’t get anywhere else, because they’re paying for our service.” Naegle added, “We want that experience to be beautiful and cinematic. It’s very important to us that our shows have high production value, as well as great actors and (top-tier talent) across the board.” HBO’s commitment to the mission of creative integrity provides a sense of purpose that informs every aspect of production. Naegle speaks to her sense of being “Proud of [HBO’s] work,” adding, “It’s an exciting time for television, and I feel like we’re right in it, taking risks and making great shows.”

Naegle’s statements—punctuated with emotionally charged terms like “proud,” “exciting,” “risk,” and “greatness”—speak to the critical role of emotion as an intrinsic source of meaningful work. “I feel,” says Naegle—in other words, she does not simply describe her work; she “feels” it. Yet, more than a list of emotions, Naegle’s comments present her emotional investment in an implicit story. The creative autonomy afforded by the subscription-based production of television does not simply lead to financial independence, but to a narrative in which employees can see themselves as protagonists in a revolutionary fight for creative independence. The language of revolution in fact permeates Naegle’s excitement for her work. Instead of mere labor, work represents a fight—“I feel like we’re right in it,” she says—for certain values in which one is “proud” to accept “risks” for the “greatness” of work grounded in ideals of ideals of freedom.

Financial independence from outside investors thus leads to a company culture in which values like autonomy and freedom motivate every aspect of work. Consider the words of Emmy-winning Sopranos producer Timothy Winter. “Their confidence in you makes you the-sopranos-hbowant to do a better job,” says Winter. “It makes you want to really push the envelope and deliver something special because you’re backed by a team that is so supportive creatively. That’s not to say they don’t ask questions and want to hear your thought process, but they respect it, and that’s a lot more than you can say for other places.” Winter’s locates his motivation—his desire “to really push the envelope and deliver something special”—in HBO’s respect for creative autonomy. Commitment to creative freedom makes for a powerful story. Moreover, the power of the story is self-perpetuating: The narrative of creative autonomy inspires the testimonials of producers like Winter, whose own description of work in turn serve as yet another story of HBO’s commitment to creative autonomy.

The financial autonomy of the subscription-based business model thus informs how employees at HBO and Netflix personally relate to their professional work. Reading the words of writers and executives for both companies, one sees how those working for HBO’s see this work as more than a job; to join the company is to assume a kind of heroism based in quintessentially American values: The rule breaking, unapologetically independent individualist who challenges established cultural conventions in the name of personal freedom.

Even Martin Scorcese, the iconic director most often associated with revolutionizing theBoardwalk_Empire_jpeg radically independent vision of film in the 1970s, now sees more creative freedom in television. When actor Mark Wahlberg—the veteran producer of HBO’s Entourage who also worked with Scorcese in The Departed—tried convincing the director to work with HBO on the series Boardwalk Empire, Scorcese was reportedly, “kind of on the fence about doing television.” Wahlberg sought to convert Scorcese—a conversion that, considering Scorcese’s commitment to the big screen, suggests a pretty monumental sea change in the cultural status and influence of television as an artistic medium. Wahlberg reports telling Scorcese, “you’ll never be happier. You’ll want to do everything that you do with them.’ And he called me in the middle of production (on the “Boardwalk” pilot, which Scorsese directed) and was like, ‘I’m so happy I did this. I feel like I’m back in the ’70s doing my own thing. Nobody’s bothering me and if I need something, I have the whole organization behind me.'” As testimonials by high-profile artists—artists themselves associated with the heroic pursuit of creative freedom—these stories are at once inspired by the very values they perpetuate.

netflix_house-of-cards.jpgIt’s not only HBO, of course. Netflix has also leveraged the autonomy enabled by subscription service to develop a work culture that supports some of the most powerful and creative programming television has seen in decades. In a 2014 interview, Beau Willimon, creator of Netflix’s highly successful and critically acclaimed series House of Cards—celebrated the newfound freedom enabled by subscription platforms like Netflix:The amount of creative freedom that is out there right now in the world on TV is unprecedented.” While HBO does offer scheduled programming, like Netflix (and most television networks the days), all of HBO’s programming is available as streaming video outside the restrictions of regular timetables. This new freedom liberates companies like HBO and Netflix from the schedule-specific demographics concerns that once determined the ratings requirements of traditional, linear networks.

The financial autonomy of the subscription-based business model thus informs how creative contributers and employees at HBO and Netflix personally relate to their professional work. Reading the words of writers and executives for both companies, one sees how those working for HBO and Netflix tend to see this work as more than a job; to join the company is to assume a kind of heroism based in quintessentially American values of independence, freedom, and authenticity.

HBO’s impressive achievement evidences the importance of autonomy as a value that informs successful business on multiples levels: A vision of business in which freedom from restrictive outside investors coincides with a work culture that inspires passionate commitment and greater creativity. 

As early as 2002, just 4 years into HBO’s great Soprano’s-inspired ascent to a leading place in the TV and entertainment industry, Thane Peterson predicted that the secret to HBO’s success rested on a strategy that would transform the very vision of American business:

The truth is, if American companies generally adopted HBO's guiding principles, tens of thousands of high-paid management consultants would be forced to find real jobs. Madison Avenue would crumble. The nation's business schools would have to be shuttered, and millions of MBAs would have to forget everything they learned. 

According to Peterson, HBO’s success rests on a paradigm shift from the quantitative orthodoxy of market research and focus groups to “gut instinct,” “originality,” “raw talent,” and respect for “the intelligence of your audience.” As hyperbolic as he may sound, Peterson was on to something. HBO’s strategy does, after all, challenge conventions that continue to inform standard business practices. The secret, however, has proven a bit subtler than Peterson outlined back in 2002. HBO’s success involves, as we have seen, a business model that draws on subscriber-driven financing to support and protect creative autonomy. Moreover, this success builds on the story of this creative autonomy as the basis of an over-riding brand narrative. HBO’s success stems from it’s ability to position itself as the archetypal rebel/hero, bravely committed to often controversial and provocative artistic innovations.

The Artist Appeal of HBO's Brand Independence

The appeal of HBO's independent brand in turn continues to draw on the high-profile talents of artists—like Martin Scorcese, David Chase, Alan Ball—similarly situated at the forefront of cultural innovation. Consider how Forbes contributor James Altucher, links freedom from the need to “cater to advertisers” to the overall issue of HBO’s “reputation”:

Because they didn’t cater to advertisers, they could also take chances on series like From the Earth to the Moon and other high quality shows that would not have gotten a lot of ad dollars but quality guys to write them, further improving HBO’s reputation.

In short, at HBO, the creative autonomy that comes with subscription-based production shapes an entire “reputation”—that is, a brand narrative that reframes the meaning of HBO’s programming. This brand story in turn draws “quality talent” that further deepens the company’s reputation—and so on. HBO’s reputation for creative autonomy also informs the narratives that shape how audiences experience HBO. HBO does not simply deliver quality stories. Rather, HBO’s brand offers a bigger story about these stories: For the company’s producers, artists, employees and, most importantly, its audiences, HBO offers participation in the heroic pursuit of independence. HBO’s brand offers an opportunity for artists and viewers to commit to the value of artistic freedom itself. That’s a powerful product.

As an inherent component of HBO's brand, the narrative of  autonomy circulates in interviews with high-profile directors, producers, and artists--as we have seen, for instance, when Martin Scorecese and Mark Wahlberg speak to the creative freedom granted by HBO, or when Kevin Spacey celebrates the autonomy granted by Netflix in support of House of Cards.   As the personal, independent views of artists commenting on their craft, these stories carry an inherent authority that reinforces the authenticity of the brand: As brand narratives, these views emerge organically from first-hand experience and immersion in a company culture and mission.  Moreover, when companies like HBO and Netflix distribute this information through company-owned blogs, videos and other web-based consumer touchpoints, these stories circulate as authentic reflections of the company's mission, independent from the agendas and sponsor-centered interests of outside channels.  Free from the obligations of paid advertisers, HBO and Netflix produce independently owned content that at once extends and embodies the idendently creative sipirit that drives their business success.  

As subscription services, HBO and Netflix have the freedom to create content that speaks directly to their customers, not to paid advertisers. In an era in which business success depends on a company's capacity to sustain and nurture creative autonomy, content ownership and subscription-based service will continue to play a defining role.   

The Value of Subscription-Service in Inbound Marketing

These values drive MarketScale's own investments in the subscription-based model for inbound marketing services. Inbound marketing is built on the values of user-centered independence from commercial agendas.  For clients, this independence means more creative freedom to create content taylored to the interests of niche audiences in target B2B markets.  To learn more about our commitment to creative content, visit our website. Or, better yet, feel free to get in touch! 

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 A previous version of this post appeared last on this blog last June.

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