WORLD: MEDIA ANALYSIS - HBO's 'no ads' attitude keeps top programmes out of reach

Products will only appear on HBO if they are the right fit for shows, Jim Edwards reports.

Sex and the City hit the headlines last year when it featured an ad for Absolut Vodka.

The episode revolved around the PR diva Samantha's attempts to promote her actor boyfriend by having him appear naked on an Absolut billboard.

The name of the ad, "Absolut hunk", became a cocktail, temporarily usurping the Cosmopolitan as the character's tipple. Absolut sales soared.

The episode was significant because it represented a rare foray into advertising and product placement by HBO, the premium pay-TV channel behind Six Feet Under and The Sopranos.

Rarer still, when TBWA\Chiat\ Day in New York created the ad and the drink, the agency did not pay for the privilege.

HBO takes no advertising, and, officially, at least, allows no product placement. There are no ad breaks and none of HBO's on-air content is sponsored by any kind of marketing. "It would jeopardise the texture of our brand," Michelle Boas, HBO's vice-president for communications, says.

HBO, in stark contrast to other TV channels in the US, exudes a monk-like disdain for the advertiser dollar. The channel makes some of the most innovative, exciting, and explicit programming in the country and has an audience that, by definition, is one of the most affluent - an HBO cable package can cost $80 a month or more. But most ad or media agencies have no relationship with the channel.

"We wish it would take advertising," Susan Nathan, the senior vice-president director of media knowledge at Universal McCann in New York, says. "It's somewhat frustrating."

It's a far cry from HBO's early days. Home Box Office began in 1972 with only 365 subscribers in Wilkes-Barre, Pennsylvania - one of its schedule highlights was a broadcast of the Pennsylvania Polka Festival. But over the next two decades, HBO concentrated on live sports, stand-up comedy and uncut movies.

VCR's arrival in the 80s presented a threat to HBO, so the channel started to create more of its own movies and shows. In particular, the mould-breaking The Larry Sanders Show put HBO on the critics' map. Since then, HBO has invested in movies and series. The glitz has been infectious - the channel is frequently approached by clients hoping for product placement, Boas says, "but we just say 'sorry'".

Adding to agencies' frustration is HBO's capricious treatment of the few brands it does get into bed with. For instance, Tony Soprano can often be seen reading a New Jersey paper, The Star-Ledger, but the paper didn't pay for any of that placement, so Tony is as likely to use it for cat litter as he is to read it.

The key, then, for agencies hoping to get their clients on HBO is to be sufficiently cool or appropriate for HBO to offer placement for free.

"We do no product placement," Boas says. "If Carrie on Sex and the City is drinking Tropicana, it's because that's what Carrie would drink."

That's how it was with Band of Brothers, the World War II mini-series co-produced with the BBC. It featured at least 600 shots of Jeeps, but DaimlerChrysler paid nothing. However, the Omnicom-owned Arnell Group in New York did persuade HBO, which spent about $10 million advertising the series, to put the Jeep logo on posters with a tagline saying the brand wanted to honour "all those who served in WWII".

In the UK, agencies are most likely to encounter HBO as a production brand, whose shows and films have been bought for broadcast by local operators.

In the US, Latin America, Hungary, Romania, the Czech Republic, Slovakia and Poland, however, HBO comes packaged as a premium-tier brand, meaning that viewers have to pay extra beyond their regular subscription fee to see it. A sign of HBO's pulling power is the fact motels in the US often advertise rooms with "Jacuzzi, AC, HBO".

HBO is, in fact, actively indifferent to western Europe, according to Boas. "Our main business is for US domestic use. If it does have a presence abroad, terrific. But basically (HBO) is creating for the US," she says.

"We really don't have much (activity in the UK), there is no branding even though our shows are there."

Given the above, why should the UK pay any attention to HBO? Simple: its programming is hard for media planners and buyers to ignore. Most US shows that transfer to western Europe follow time-tested formulas but HBO's shows, created without concern for advertisers, can break conventions.

For a start, they are sexier and more sophisticated than anything produced by the mainstream US TV networks NBC or CBS. However, they are often longer and narrower in audience appeal.

This is both HBO's strength and its weakness. With subscriber fees as its primary revenue source, it doesn't have the option of increasing spot prices for its successful shows. Secondary resale markets such as the UK therefore take on an added importance to HBO's finances. It would take only a handful of bad production decisions to cripple HBO's operations and it would be hard-pressed to cushion the blow with its constantly churning and relatively tiny global subscriber audience of 45 million.

HBO's daily revenue reality, Boas says, is this: "We lose subscribers monthly because people are like, 'oh, I don't have enough money' or 'I lost my job'."

"It's also harder to grow," Boas adds, "because there is a base of people who have cable. And that base of people isn't growing much so it's harder to grow our base."



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