![]() ![]() Even the city manager of Wilkes-Barre declines to attend the launch party.Working out of a storefront which still had water marks half-way up the walls, HBO representatives managed to sell just 365 residents on getting HBO for $6 per month. ![]() Shortly before launch, Hurricane Agnes hits, leaving the streets of Wilkes-Barre submerged and half of the city's 10,000 cable subs disconnected. They shift to the neighbouring town of Wilkes-Barre.But wait! Crisis #1: NBA games were to be a prime component of HBO's bundle, and the NBA won't let you broadcast in Allentown due to blackout rules (Allentown was too close to the Philadelphia 76ers.).The equivalent of Larry Page pushing Netflix to stream to Chrome users.They want a more extensive network, and settle on the Allentown network which is owned by the President of Time-Life.Sorry, his Manhattan network just has too few subscribers.Time pushes not to debut HBO on Sterlings' distribution network.They only managed to settle on a name after agreeing they'd change it later.Time executives didn't like "The Green Channel".Right on schedule, we've arrived at the next chapter of every product story:.Even this sweetened variant got 50% conversion. The company carried out a test in Pennsylvania where salesmen went door-to-door offering a first-month-free-and-refundable-installation-charge deal.Another survey managed to eek out a modest 4% that described themselves as "almost certain" to pay.99% said they wouldn't pay for the service.This Google Form performed exactly as you'd expect.In yet another amazing episode of data-driven design, Time-Life sent out a direct-mail research brochure to survey for responses.Paid TV had been tried in the past and never worked. This idea seems obvious now, but very controversial at the time. Premium content people would subscribe for. He decides to make "The Green Channel".Dolan realizes what Reid Hastings re-figured out decades later: to endure, he needs exclusive content.(Netflix wouldn't be worth much with just an HTML5 video player.) With the added opiate of vacation, Dolan realizes that pipes aren't enough.But Sterling is still growing slowly and hemorrhaging money.Running out of cash, Doland sells 20% of his company to the Time-Life company.Two years after launching, Sterling laid about a dozen blocks and had… 400 subscribers with a burn rate of $3.5M a month.Only one option left: Sterling decided to lay cable below ground at an inflation-adjusted cost of about $2M per mile.(This ordinance kicked in after the Great Blizzard of 1888. Telephone poles? Illegal due to regulation that required all new telecommunication wires to be buried below ground to prevent service disruption during the winter.Microwave towers? Don't work well given Manhattan's tall buildings.How are you going to get media to your users? Back then distribution was won in atoms, not bits.HBO started as "Sterling Information Services" in 1965 by one Charles Dolan, with the goal of providing television to New York tourists in hotels.Notes and excerpts are below that will be of interest to any startup aficionado: The parallels between the modern day media goliath and a small, fledgling startup are hard to miss. Inside The Rise of HBO covers the origins of HBO.
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