There are more than 10 million reasons why The Walt Disney Co. chairman and CEO Bob Iger is Multichannel News’s executive of the year for 2019.

The first 10 million are the larger-than-expected number of people who signed up for the Disney+ streaming service on Nov. 12, the first day it was available.

Disney+ is the result of Iger, who started his career as a weatherman in Ithaca, New York, forecasting that technology was splintering the pay TV environment. The cord-cutting that resulted from viewers getting more choice about how they consume video was eating into Disney’s most profitable unit, ESPN.

“I think he’s done an incredible job of getting Disney+ off the ground,” said analyst Rich Greenfield of LightShed Partners, who is outspoken about the impending demise of the traditional TV business. “Technically, the quality of service is great and the breadth of content, especially old library content, is incredible.”

When Iger admitted on Disney’s fiscal third-quarter earnings call in 2015 that ESPN’s subscriber count was falling, the company’s stock dropped 7%. The same forces would impact the other TV businesses owned by Disney and those of its competitors.

After 13 years as CEO, Iger decided to be the disruptor instead of the disrupted. He bet the company on the idea that Disney could build a direct-to-consumer business on its trove of iconic content. His strategy was to turn Disney inside out. It stopped selling movies and shows to streaming competitors like Netflix, bought BAMTech to get a platform to launch ESPN+ and acquired 21st Century Fox to control even more content and streaming service Hulu.

Disrupting the Disruptors

With all those elements in place, Iger laid out the plans for Disney+ at an investor day held April 11 on the Burbank, California, movie lot where films like Mary Poppins were made.

“My grandparents took me to see Cinderella when I was a young boy, and just this last Christmas, I watched it with my grandchildren,” Iger told his audience. “That’s five generations of my family all entertained by the same film. And a perfect illustration of what evergreen means to us and just how much value it generates.”

While its films are timeless, Iger said it was time for Disney to find a new way to do business.

“A core tenet of ours since Walt founded the company is to create change and not just to sit back and watch it happen,” he said. “Now that’s not easy. It takes commitment, it takes perseverance, it takes patience and a lot of talent. And borrowing from one of Walt’s greatest strengths, it takes courage.”

Investors and analysts were shown the product, which would become the home for content from the company’s extraordinary brands: Disney, Pixar, Marvel, Star Wars, National Geographic, The Simpsons. It would have hit films like Avengers: Endgame, classics like Cinderella and original content like the Star Wars series The Mandalorian. They were told it would cost consumers just $6.99 a month and that the company expected it to have between 60 million and 90 million subs and turn profitable by 2024.

The next day, Disney stock jumped 12% to a then-record $130.06 per share.

By the time Disney reported its fiscal fourth-quarter earnings on Nov. 7, just days before the launch, Iger said that Disney+ was “the most important product that the company has launched” since he was in charge. Disney was “all in” and determined to “launch big and scale fast.”

Launch big and fast it did. Signing up 10 million subscribers in one day was “astounding,” said analyst Todd Juenger of Sanford C. Bernstein. “Before investor day, we were debating with investors whether Disney would get 10 million subs in the first year,” he said. “In recent months, the debate was whether Disney would be at 10 million subs when they reported fiscal first-quarter earnings in February. Nobody — not even the biggest bulls in their wildest dreams — expected 10 million signups in one day.”

According to Juenger, the launch added $18 billion to Disney’s market valuation in the four hours of trading after the company disclosed how many subscribers it had. (The company said it would not update the subscriber count until its next earnings report.)

Disney+ was not the first big bet Iger has made since becoming CEO in 2005. Iger was with ABC when it was acquired by Capital Cities and joined Disney when it purchased Capital Cities/ABC in 1995.

Picking a successor to then-Disney chairman and CEO Michael Eisner in 2005 was a difficult process, with the company going through a number of heirs apparent. Eventually Iger emerged as the only internal candidate for the top job. In a MasterClass presentation about business strategy released in November, Iger said a key part of convincing Disney’s board was outlining his priorities for the company, which he boiled down to three points: investing in creativity, using technology in ways to bring content to consumers in innovative ways and expanding internationally. “I got the job and the next step was to articulate them to the company and then ultimately to implement them,” Iger said.

A proponent of the value of brands, Iger convinced the board that Disney should buy Pixar for $7.4 billion in 2006, Marvel for $4 billion in 2009 and Lucasfilm, creator of Star Wars, for $4 billion in 2012. In 2019, those powerhouses would help Disney smash records by taking more than $10 billion at the box office, with Star Wars: The Rise of Skywalker set to open on Dec. 20.

Disney this year outbid Comcast for 21st Century Fox, paying $71 billion. After the acquisition, Iger continued to reorganize the company to emphasize streaming.

The new direction means big changes for many longtime Disney TV executives, some of whom had to leave the company following the Fox deal.

A former Disney executive who worked with Iger said that Iger is well-liked and good at getting the company to follow his lead.

“It’s one thing to go along with the company plan [and] another thing to believe it,” the executive said. “Bob’s good at that. They believe him. Everything he’s done, whether it’s Pixar, whether it’s Lucas, it’s worked out. He’s got more than the benefit of the doubt.”

That kind of communication is important to Iger. “Strategy is only as good as your ability to articulate it,” Iger said in his MasterClass presentation. “Clarity becomes incredibly important. Clarity actually is an essential ingredient to good leadership as well.

“When you lead people you need to be very, very clear about what you expect of them,” Iger added. “It’s very, very important that you communicate quite effectively with a set of people that ultimately are going to go out and implement your vision or your strategy across the company and I believe that that’s something that needs to happen. Not just once but on a constant basis.”

While Disney+ is off to a fast start, its future is not determined. IMA Research said that after five days Disney+ was up to 15 million subscribers. That compares favorably to 1.1 million subs for Apple TV+, which launched Nov. 1. On the other hand, a poll conducted by Express VPN found that 23% of Disney+ subscribers were likely to cancel within six months. If forced to choose, 35% said they’d pick Netflix over Disney+.

The streaming push also impacted Disney’s profits. Disney’s fiscal fourth-quarter earnings from continuing operations were down 72%.

“I think the unanswered question is: is Disney+ and Hulu just accelerating the collapse of the legacy ecosystem?” said analyst Greenfield. “Bob deserves credit for pivoting and finally realizing that the company had to make a meaningful shift and really lean in hard. But he still has a lot of assets tied to that legacy ecosystem. What happens to those? I don’t even know why he wants to own ESPN.”

Eyeing the End of the Ride

As for Iger’s future, the executive has already delayed his retirement to oversee the acquisition of 21st Century Fox and launch Disney+. He received $65.5 million in compensation for 2018. He was asked about how long he’d stay at the company during the Investor Day presentation in April.

“I have been CEO since October of 2005 and as I’ve said many times, there’s a time for everything and 2021 will be the time for me to finally step down,” said Iger, 68, who titled his recent memoir The Ride of a Lifetime. “I have been engaged with the board for quite some time in discussion about succession. And they’ve been engaged in a succession process, and we continue to feel that they will be able to identify my successor on a timely enough basis so that this company has a smooth transition.”

After nearly seven decades in the media business, beginning with a string of small local Australian newspapers in the 1950s that he built into the television, film and publishing behemoth that became News Corp. and 21st Century Fox, Rupert Murdoch again managed to shock the world with his decision last year to sell the bulk of his empire to The Walt Disney Co.

While the elder Murdoch has made a career out of going against the grain, mainly in buying assets at what others thought were exorbitant prices, this time was different. This time, Murdoch and Fox were sellers, and many pundits took their action as a sign that it may be time to throw in the media towel.

By now, Murdoch and Fox should be used to being underestimated. Whether it be the $1.58 billion the fledgling Fox broadcast network spent in 1993 to win National Football League television rights — an unheard of sum at the time, but almost quaint today — the 1996 decision to launch an all-news channel with a conservative bent (Fox News Channel) or the $5.7 billion Murdoch paid in 2007 for The Wall Street Journal (a 67% premium), there has been a common theme to his company’s actions: They knew something others didn’t.

That maverick sensibility has driven Rupert Murdoch, now 21st Century Fox’s executive co-chairman, since the beginning. It’s a trait he has passed on to sons Lachlan, also executive co-chairman, and James, 21st Century Fox’s CEO. Collectively, the three Fox leaders are the 2018 Multichannel News Executives of the Year.

Driving Up the Price

In typical Murdoch fashion, the most recent deal didn’t go down without some controversy. Disney, which had agreed to buy roughly two-thirds of 21st Century Fox in December 2017 for $52 billion, ended up paying $71.3 billion for the assets after a month-long bidding war with Comcast. After the deal is closed — expected within the first quarter of 2019 — the Murdochs will be among the largest individual shareholders in Disney and will control New Fox, consisting of 28 owned-and-operated television stations, the Fox broadcast network, cable news stalwarts Fox News Channel and Fox Business Network and national sports channels FS1, FS2 and Big Ten Network.

In one fell swoop, the Murdochs have transformed one of the world’s biggest cable and broadcast content companies into a leaner, meaner and more streamlined entity mainly focused on live news and sports.

Disney has doubled down on content under the premise that in the new streaming video paradigm, volume will win the day. Fox, though, has taken the opposite tack, focusing on live fare that will hopefully drive viewership, ratings and ad dollars its way.

The Murdochs were not available for this report. but there has been plenty written and speculated about the Disney deal and the New Fox entity that will emerge. For the most part, New Fox will be run by current 21st Century Fox co-executive chairman Lachlan Murdoch, who will be chairman and CEO of the new business. Lachlan came back into the family business in 2014 after a nine-year hiatus running an Australian investment fund, Illyria Pty Ltd.

While Lachlan will get an assist from 87-year-old father Rupert, who will be co-chairman of New Fox, James Murdoch, who had been CEO of Fox’s Sky satellite TV business in the U.K., and served as CEO of Fox for the past three years, won’t be a part of the new entity, instead opting to go off on his own, at least for a while.

Speculation has been rampant about where James Murdoch will end up. Early guesses that it would be in a senior leadership role at Disney or as chairman of electric car and aerospace company Tesla (he’s a board member) were wrong. For his part, Lachlan has said James was integral in running Fox and in making Sky plc into the leading European satellite platform — it was sold in October to Comcast after another bidding war — but that the Disney sale process was “cathartic” and that his brother decided it was time for a change.

James put it pretty succinctly himself at the Recode conference in May, months before the sale was even decided. “I think it’s time to do something new,” he said.

Comcast dropped out of the bidding for the Fox U.S. assets, but it stayed in the fray for another prized Fox property: U.K. satellite giant Sky. Fox had been trying to consolidate Sky for years (it owned 39%), but was rebuffed by U.K. regulators that feared full control would put too much power in the Murdochs’ hands. When Comcast lobbed in its $31 billion bid for Sky in February, it touched off a second bidding contest that the cable operator ultimately won with a nearly $40 billion commitment. At that price, Comcast also agreed to purchase Fox’s Sky stake for about $15 billion, further filling up the Murdoch’s coffers.

While some pundits had earlier believed the Sky stake was an asset the Murdochs would never give up, it again became a question of value. Lachlan Murdoch said the family holds no grudge against Comcast over Sky. “We don’t have skin in the game anymore,” he said at The New York Times DealBook conference on Nov. 1. “I think [Comcast chairman and CEO] Brian [Roberts] will be a great steward of Sky and they will do very well.”

To understand the impact of the Disney deal, one only has to look at Fox just four years ago when, sensing a shift in the content business, it made an unsolicited offer to buy Time Warner Inc. for $80 billion. That offer was rebuffed, but it was partially based on Fox’s belief that Time Warner properties, especially premium channel HBO, weren’t being properly utilized on the internet.

Less than a year after Fox made its offer, Time Warner launched its standalone HBO streaming service HBO Now and, a year after that, agreed to a $108.7 billion sale to AT&T.

Fox said back in 2014 that, after losing out on Time Warner, it was through with acquisitions and would instead focus on growing the business organically. Just two years later, while the AT&T-Time Warner regulatory approval dance was going on, the idea of selling assets rose to the forefront after Verizon Communications knocked on Fox’s door about a potential deal, Lachlan Murdoch said at the DealBook conference.

Though the family had been considering its moves in the new TV and entertainment landscape, Lachlan Murdoch said the prospect of being owned by a phone company was not so attractive.

“We didn’t think Time Warner would be a better-run media company because it was owned by a phone company,” he said at the DealBook conference. “We didn’t see the strategic fit.”

Lachlan Murdoch said the ultimate decision to sell was not made emotionally or lightly.

“The journey to sell such a large part of the business was one that took some time, took some time to really think about,” he said at DealBook. “To think about where the industry has gone, what the challenges were that we saw on the horizon, particularly in the entertainment business, but also about where these assets could sit to make them more viable and stronger than with us.”

A few months after the initial Verizon overture, Disney chairman and CEO Bob Iger called with a proposal, which Murdoch said “immediately made sense. My brother and I went to my father’s office and had a long conversation about it.”

When Disney announced on Dec. 14, 2017, that it had agreed to purchase the Fox assets — cable channels FX, FXX and National Geographic; the 20th Century Fox film and production studios; 22 regional sports networks; and Fox’s 30% interest in online video pioneer Hulu — it had expected to sew up the deal in a few months. But six months later, after weeks of speculation, Comcast lobbed in an all-cash bid for the assets, touching off a bidding war that made Fox and the Murdochs considerably richer.

Lachlan Murdoch hinted that even after signing the first Disney agreement, Fox knew the battle wasn’t quite over.

“Comcast was there in the beginning, they came shortly after we heard from Disney,” he said at the DealBook conference. “We couldn’t get our heads around the regulatory risk. I thought that our initial negotiation with Disney was very good, but that we could get a higher price if we could get a bidding war going. We felt there was more value.”

That bidding war lasted for about five weeks and ultimately kicked up the price for the Fox assets by nearly $20 billion. In addition, as part of the regulatory approval of the deal, Disney has agreed to sell off the 22 regional sports networks — valued by some at around $20 billion — within 90 days of closing its larger Fox deal.

Able to Buy More Assets

Now flush with cash, New Fox is expected to be on the hunt for more assets to beef up its existing lineup. So far the company has ponied up $3.3 billion over five years for rights to NFL Thursday Night Football, and another $1 billion over five years for WWE programming beginning in 2019. And there will be more.

“We will buy other things,” Lachlan Murdoch said at the DealBook conference. That could include its former regional sports networks, currently being auctioned by Disney; additional television stations; more sports assets or practically anything else. Lachlan Murdoch said the guiding principle to any additional acquisitions will be if they add to Fox’s already strong position in the industry.

“We are must-have channels for our distributors,” Lachlan Murdoch said at the DealBook conference. “What we don’t want to do is use that leverage in businesses that are not must-have.”

New Fox also appears to be bucking the trend for media companies to chase the Netflix streaming model, focusing more on direct-to-consumer offerings than on traditional distribution methods. Disney is a prime example: it launched a sports-themed DTC offering in April (ESPN+) and plans to launch an entertainment streaming offering, Disney+, next year that will include the recently acquired Fox content.

While Fox also has streaming plans — Fox News launched on-demand OTT service Fox Nation on Nov. 27 — it also realizes that an entertainment streaming service would require bulk the company simply doesn’t have.

At the DealBook conference last month, Lachlan Murdoch said Netflix really has two businesses, distribution and content generation, which both require tremendous scale to be successful.

“What we were seeing, and one of the reasons we sold to Disney, [was] for us to have scale in a direct streaming service, whether it is an FX streaming service or you could bundle some of our channels in an on-demand service, you can get to 2 [million] or 3 million subscribers, like CBS All Access, but then you get capped,” he said. “You need to have the scale of 20, 22, 30, 50 million subscribers to have enough significant scale to make that a real business.”

Although the Disney deal isn’t expected to close until next year, New Fox already has assembled much of its management team. Aside from Lachlan, who will become co-chairman and CEO of New Fox after the deal is closed (Rupert Murdoch will be co-chairman), the company has named 21st Century Fox chief financial officer John Nallen as chief operating officer, while Fox Sports chief operating officer Eric Shanks will become CEO of that unit. Fox News and Fox Business CEO Suzanne Scott and Fox Television Stations CEO Jack Abernethy will continue in those roles in the new company.

The company also poached longtime AMC Networks executive Charlie Collier to become CEO of entertainment at New Fox. Collier, who brought such scripted hits as Mad Men, The Walking Dead and Breaking Bad to AMC, on the surface seems an odd choice given the company’s expected focus on live news and sports, but Lachlan Murdoch said the different genres can reside comfortably and in a complementary manner within the new structure.

Building Around Live Programming

“We see a strength and strategic narrative in New Fox around live programming,” Lachlan Murdoch said. “Having said that, if you look, the amount of entertainment programming is declining at an incredible rate. What we can do is invest in the NFL, invest in baseball, the WWE, and use those to promote our entertainment programming as well. The way I look at is you have a tentpole with the best live news programming in the country, a tentpole with the best broadcast sports in the country, and how do you lift up the entertainment to that?”

A prime example of that strategy is the Tim Allen sitcom Last Man Standing, which Fox took after ABC cancelled the show last year. Moving the show to Friday nights allowed Fox to heavily promote the programming on Thursday nights — when it airs Thursday Night Football — into Friday. Ratings, Lachlan Murdoch said, are 80% better on Fox than they were on ABC.

News and sports has been a powerful draw for Fox and will continue to be. Lachlan Murdoch noted that during Major League Baseball’s World Series and a heavy news cycle in October, Fox networks had 50% of the live primetime U.S. television audience. He added that in late September and early October, the one-two punch of Thursday Night Football and the Senate confirmation hearings of now-Supreme Court Justice Brett Kavanaugh meant that 74% of live viewers in the country were watching live content on a Fox platform.

The Murdochs aren’t the only cheerleaders for New Fox. The Disney deal helped drive 21st Century Fox stock to new highs, with shares up by more than 40% for the year. Some analysts believe there is even more room for growth.

Morgan Stanley media analyst Ben Swinburne estimates that with a leaner, meaner New Fox, the Murdochs will be able to grow affiliate fees for the remaining cable networks by 7% to 8% and retrans fees by about 18% annually.

“Secular headwinds in traditional TV are well known, and we believe Fox’s focus on exclusive sports and the ratings success at Fox News support its ability to drive higher affiliate revenue growth as a smaller portfolio of U.S. networks,” Swinburne wrote in a recent note to clients.

Overall, Swinburne predicts New Fox can generate about 10% adjusted cash flow growth annually, after a flattish fiscal 2019 due to increased sports investments, through fiscal 2023.

Sports will be key to that success. While the news division has driven strong growth over the years — Swinburne estimates that Fox News has grown its share of C3 household ratings from 3.5% in 2010 to 5.3% in 2018 — Fox’s 2013 decision to convert its Speed and Fuel TV networks to FS1 and FS2 helped drive a 40% increase in affiliate revenue between 2014 and 2018. Over the next five years Swinburne sees the sports channels growing affiliate revenue between 7% and 8% annually.

Room to Grow Fees, Retrans Cash

MoffettNathanson media analyst Michael Nathanson, although bearish on linear TV prospects in general, also noted in a recent research report that Fox has ample runway for affiliate fee and retrans gains.

While operating profits in fiscal 2018 were down significantly at the television unit — $362 million, compared to $894 million in the prior year — and will continued to be pressured in fiscal 2019 as increased sports costs are factored in, Nathanson said it would be a mistake to use that as a benchmark for the future.

That massive investment in sports “equates to an unrivaled negotiating hand that will lead to accelerated revenue growth over the next five years,” Nathanson wrote.

At current valuations, most analysts peg New Fox at between $9 and $13 per share, based on the $38-pershare price Disney is paying for the other Fox assets. But most see that valuation — roughly nine times estimated 2018 earnings — as missing the point.

In his report, Nathanson wrote that there is a danger that too much focus on near term numbers “clouds the view of the compelling story at New Fox,” adding that all signs point to strong growth ahead.

For Fox and the Murdochs, it’s just another case of being underestimated. We’ve all seen how that usually pans out.

It’s not easy being HBO chairman and CEO Richard Plepler these days.

Aside from parent Time Warner’s pending $108.7 billion merger with AT&T — a deal he believes will get done despite some regulatory roadblocks — Plepler navigates changing viewer habits and rising competition from giants Netflix, Amazon and Hulu, all while deftly embracing new distribution partners without upsetting the premium programmer’s traditional pay TV partners.

While lesser executives may have thrown in the towel years ago — or started downing sedatives and Pepto-Bismol for breakfast — Plepler responded by creating one of the most popular over-the-top offerings in the industry, HBO Now, and doubling down on cutting edge and thoughtful programming with shows like Girls, Insecure and The Night Of, and leading the pioneering premium channel to what might be its best year ever.

In the third quarter, subscriber revenue at HBO was up 12%, a 13-year high for the channel. And its subscriber rolls are climbing — it reached 34 million domestic customers and another 100 million worldwide in Q3.

Plepler, the Multichannel News 2017 Executive of the Year, may be well-known for his easygoing, personable manner, but beneath that lies an intensely focused, competitive executive.

MCN Executive of the Year | He's GoT That: 'Game of Thrones' co-creators and showrunners David Benioff and D.B Weiss answer our questions about working with Richard Plepler

That focus and intensity was put to the test in 2015, shortly after Time Warner fought off a 2014 hostile takeover attempt from 21st Century Fox that was launched in part because of a perception that the parent company wasn’t taking advantage of HBO’s over-the-top potential.

HBO and Plepler responded by launching HBO Now at an Apple user conference in San Francisco. Later, Plepler was pummeled by questions as to whether HBO was taking the right approach to OTT — offering it to its distribution partners first to market to their broadband-only customers. Plepler saw huge opportunities in those 15 million to 25 million broadband-only customers, but he had to find a way to convince investors and distributors that such a service wouldn’t cannibalize the existing customer base.

Plepler said the problem kept him up nights, and he finally concluded that the traditional path to greater profitability — simply raising prices — wasn’t the way to go. He believed that raising penetration, for both the traditional HBO service and HBO Now, would lead to a classic win-win for both the network and its distributors.

“What we wanted to do is build a structure with our partners whereby penetration and scale became the motivating drivers,” Plepler said. “And by doing so the price would go down.”

It wasn’t an easy sell to operators, but one that resonated over time. And it helped solidify Plepler’s reputation as someone who was willing to go outside of tradition to get things done.

“Richard is an extraordinary leader and a great partner,” said Comcast Cable CEO Dave Watson. “His focus on creativity and innovation has enabled HBO to consistently produce incredible content year after year.”

Despite critics that may have scoffed at the strategy, Plepler was convinced that HBO was vastly underpenetrated.

“If you look at the simple fact that we understood how much room for growth there was in the traditional ecosystem and in the new ecosystem, it was a classic opportunity for both our partners and us to grow our business,” Plepler said. “Those are the structures we built, differently in different ways with different partners.”

Time Warner chairman and CEO Jeff Bewkes earned his chops running HBO before ascending to the corner office, so he knows the complexities of the job. “In a time of ever-expanding viewer choice, HBO defines world-class and so does Richard,” Bewkes said. “He and his team are unrivaled in their ability to meld ambitious, breathtaking original programming and Hollywood hits with industry-leading innovations like HBO Now — bringing HBO to its passionate and growing audience in new and exciting ways around the globe.”

But naming Plepler, a former communications chief, to head up the premium programmer was a departure. In the past, HBO honchos either came from the content side or, like Bewkes, the finance side of the house. Plepler was from neither: He joined HBO in 1992 as senior vice president of communications, rising to executive VP in charge of creative aspects before being tapped as co-president of the unit in 2007. He was named chairman and CEO of HBO in 2012, effective in January 2013.

Helping to Find Balance
Telsey Advisory Group media analyst Tom Eagan said the experiment has turned out to be vastly successful. “What he did is help the company find that balance between content and finance,” Eagan said. After former HBO chief Bill Nelson, a finance guy, decided to retire, the worry in the analyst community was whether HBO would focus enough on content, he added.

“The two [content and finance] have really supported each other,” Eagan said. “Having popular and in-demand content has allowed them to ask for higher affiliate rates from the operators and ultimately allowed them to roll out HBO Now.”

While HBO Now has exceeded expectations — it has grown to about 2 million customers — HBO itself, via linear channels, multiplexes, the HBO Go online add-on service and HBO On Demand, continues to keep the competition at bay.

Netflix, once dismissed by cable operators as an upstart, passed HBO in terms of U.S. subscribers in 2013 and has managed to increase its lead over the years, finishing with 52 million U.S. customers at the end of the third quarter. Moreover, and perhaps most importantly, Netflix commands global scale with 109 million subscribers around the world; outside the U.S., HBO licenses its content with distribution partners.

In the meantime, Amazon Video has continued to beef up its offerings and Hulu, owned by 21st Century Fox, The Walt Disney Co. and NBCUniversal, launched a live TV service earlier this year.

HBO and Plepler have managed to thrive through a mixture of luck, pluck and good old-fashioned business acumen. HBO invented the premium original programming genre 20 years ago with The Sopranos and, on Plepler’s watch, the awards have piled up. Since 2007, Plepler has continued the winning streak, green-lighting iconic series such as Girls, True Blood, Boardwalk Empire, The Newsroom, Game of Thrones and Veep. Along the way, the company has amassed a warehouse full of Emmy Awards — Game of Thrones has 38 statues, the most for a scripted series in Emmy history — a testament to HBO’s commitment to quality and its brand.

To Plepler, the brand is becoming more important than ever as new over-the-top services emerge and choices proliferate. In the past five years, the number of primetime original series available to consumers has grown from 288 in 2012 to 455 in 2016. As more programming choices bombard viewers, being able to associate a particular brand with high quality can be invaluable.

“What you know when you trust a brand is if it delivers on its implicit promise — and our implicit promise is the creation of excellence — is that when you go there, you are going to find a range of things that delight you, entertain you and are engaging in this very, very busy life where you are pulled in a hundred different directions,” he said.

Plepler throws cold water on the notion that viewers increasingly don’t recognize brands, and instead seek individual shows. Most OTT services don’t usually identify a particular show’s network of origin.

“I would rather look at it like this: It is absolutely true that things will be disaggregated and then people will find different programming in different ways,” Plepler said. “And for some people, that will be adequate and satisfactory. It is also true, as we’re seeing, that if you deliver a brand-value proposition for a fair price, and you give people a surfeit of quality and entertainment, to wit: four Hollywood studios; 3,000 hours of library content; the ability to watch their program on whatever device they want whenever they want it and you are constantly true to the promise that you are making to the consumer, there is an enormous amount of growth in our ecosystem. We’re seeing it. We’re living it right now.”

That brand quality and recognition will also lead to deeper penetration rates for the network, Plepler said, adding that while it will never be in 100% of U.S. homes, HBO will “absolutely” get above 50% penetration domestically.

“So let’s define success correctly and say that for HBO, it’s continuing to grow our subscriber base and our penetration above 50% in the country where we’re now somewhere in the mid-30s,” Plepler said. “And we continue to deliver on that brand promise in that clutter, there are at least we think another 20-25 million homes who will be more than excited to come to the harbor of quality that is HBO.”

Critical to that thesis is that a high level of quality is maintained. HBO has consistently offered high quality — it won 29 Emmy Awards in 2017, the most of any network for the 16th consecutive year. In an era when subscription VOD services such as Netflix are spending $7 billion annually on original programming — HBO’s content budget is in the $2 billion range — and others such as Amazon and Hulu continue to open their wallets to finance new shows, could that track record be in danger? Plepler says no.

Plepler argues that throwing money at programming isn’t the solution — it’s attracting the right talent. “Talent wants to be in an environment where they know that from the development end, the marketing end, the promotion end, the experience that talent has at HBO, we believe, is an extraordinary one,” he said.

The number of producers, directors and writers who have continuously worked with the network over the years — especially after they have had big successes — seems to back that up. The list is a long one, with some, like The Wire creator David Simon, nearing the 20-year mark with the network.

Simon’s first project with HBO was in 2000 with The Corner, a miniseries based on his book The Corner: A Year in the Life of an Inner-City Neighborhood, with Ed Burns. Simon’s next project for HBO was the critically acclaimed series The Wire, which concluded its five-season run in 2008, followed by miniseries Generation Kill, the highly praised Treme (which ended after its fourth season in 2013) and 2015 miniseries Show Me a Hero. This year, he introduced The Deuce, his take, with frequent collaborator writer George Pelecanos, on the Times Square sex trade of the 1970s.

Game of Thrones writers David Benioff and D.B. Weiss are wrapping up their final year on the George R.R. Martin saga (which has at least five prequels in the works for the network), as well as other projects.

“When talent comes here, they want to come back,” Plepler said. “It’s infectious because talent hears from talent, writers hear from writers, actors hear from actors. They want to be here.”

Benioff and Weiss said they picked HBO for the GoT saga because it was the home of their favorite shows — The Sopranos, Deadwood and The Wire. But it also had a reputation for attracting top-notch talent and providing budgets for cinematic quality productions.

“So once we realized the story of Game of Thrones could only be told in the multiseason format of a television program, HBO felt like the best choice by far,” they said via email from on location in Northern Ireland. “For both of us, this has been the best experience of our working lives.”

They said Plepler has played a big role in shaping that experience. “In a business full of smiling windsocks, he is not a windsock,” Benioff and Weiss said. “He doesn’t focus-test his decisions, he doesn’t crowd-source his decisions. Richard’s decisions come from Richard, and he stands by them.”

Eagan added that keeping content producers happy is simply good business.

“It makes the business affairs side of the equation easier too,” Eagan said. “If you have an existing contract with someone, maybe it’s for three titles, it’s easier to extend that contract for another five titles. It’s easier to extend those same producer deals if you’ve already done work with them. It’s not as easy to start from scratch with a new one.”

Those kinds of intangibles are not only important to talent, they are what drive HBO’s and Plepler’s overall philosophy of picking projects that satisfy business and creative needs.

“That does not mean that more is better; it only means that better is better,” Plepler said.

He credited the corporate culture at HBO. Meanwhile, there has been an avalanche of accusations of assault and misconduct throughout the industry following the expose of sexual assault and rape allegedly committed by former The Weinstein Co. chief Harvey Weinstein. Amazon Studios president Roy Price, House of Cards producer and star Kevin Spacey and comedian Louis C.K. have all been accused of various sexual harassment offenses, among others.

HBO canceled a planned comedy special with Louis C.K., removed him from the lineup of the Nov. 18 Night of Too Many Stars, a special to raise funds for autism, and has taken down his prior comedy series Lucky Louie and standup specials from its on-demand lineup and HBO Go. The network also dropped plans to turn political pundit Mark Halperin’s book on the 2016 presidential election into a movie, after allegations that he sexually harassed five women while working for ABC News several years ago. Plepler called the myriad allegations “repugnant” and “unconscionable,” and added that corporate cultures that turn a “blind eye” to the problems are telling employees that providing a safe environment isn’t a core value.

“There is no ambiguity in this company about what our core values are on diversity, on manners, on how we treat one another,” Plepler said. “I think these issues transcend even the issue of sexual harassment. Just go to our core values as a company and how we interrelate as colleagues.”

For Plepler, it comes down to simple manners, and the way a company conducts itself in interactions inside and outside the organization.

Collegial, but Competitive
“Don’t ever mistake manners inside an institution with an absence of fierce competitiveness,” Plepler said. “I think sometimes people think that manners can be tantamount to softness or somehow an enterprise isn’t as fierce. I think the opposite is true. I think manners enable you to have inter-relationships with your colleagues of mutual respect and it frees and liberates people to speak their mind. And people feel proud of being part of an institution and can operate without fear or favor, say what they want.”

There have been a few misses for HBO — John From Cincinnati, a 2007 allegory written by Deadwood creator David Milch that fell short with viewers and critics; Lucky, a 2012 horse-racing drama from Milch starring Dustin Hoffman, canceled after animal rights activists protested the death of several horses on the set; and 2016 rock ‘n’ roll saga Vinyl. But the successes far outnumber the miscues. Game of Thrones, which debuted in 2010 with an average viewership of 9.3 million, finished its seventh season by growing that mark to 33 million, a record for an HBO original series.

More recently, HBO came under fire for Confederate, an alternative history piece that would be the next offering from Benioff and Weiss. It would depict an America where the Confederacy successfully seceded and slavery continues in modern times.

The announcement of the series created a huge backlash, with several critics calling it wish-fulfillment for white supremacists. Plepler defended the concept, and conceded HBO could have done a better job announcing it to the public with more context.

But he added the series — to be written by African-American writers Nichelle Tramble Spellman and Malcom Spellman, in addition to Weiss and Benioff — is an important one and one that holds a mirror to what former CIA and NSA director Michael Hayden has called the “thin veneer of civilization.”

Plepler said not a single word of Confederate would be written in the next year and a half, because Benioff and Weiss are still working on Game of Thrones. “We’re not going to be trivializing slavery; we’re not going to be creating an overwrought version of the antebellum period,” Plepler said. “It’s much more complicated.”

HBO has been a champion for diversity both in its corporate culture and through its programming, and was honored by the Walter Kaitz Foundation earlier this year. In his acceptance speech, Plepler urged the industry to break the culture of fear and exclusion that is enveloping the country, vowing to continue to present diverse voices and to allow more people across the nation to see other races, cultures and ideas.

HBO has been at the forefront of presenting different views and cultures in its programing and continues to take up the mantle with programming such as Insecure and documentaries such as Baltimore Rising.

As Game of Thrones nears the end of its run, a familiar chorus of questions is erupting from the press and critics: What’s next? It’s a pressure that Plepler is used to, dating back to his first Television Critics Association event in 2007, just as its groundbreaking original series The Sopranos was ending its run. How would HBO ever replicate The Sopranos? His answer was simple: It wouldn’t. “The Sopranos is, you know, a once-in-a-generation show,” he said. “What there will be is the next great shows. And who knows what the next great cultural phenomenon will be. But we are going to focus on working with the best creative talent that we can find.”

Later that year, HBO signed on with director Alan Ball for his new series, a vampire drama called True Blood, presaging a flood of vampire-centric entertainment that followed like Twilight and Vampire Diaries.

“But the answer was we didn’t presage that,” Plepler said. “We bet on Alan Ball, which was a very, very good bet. And then in came [Girls creator] Lena Dunham and in came [Veep creator] Armando Iannucci and in came [Silicon Valley creator] Mike Judge and in came these two guys who had never done a television show in their life, David Benioff and Dan Weiss, pitching George R.R. Martin’s oeuvre A Song of Ice and Fire.”

Plepler said he’s even more excited about the upcoming season with new episodes of prior hits like Westworld, True Detective, Big Little Lies and The Night Of, as well as the Game of Thrones prequels — he said he has read two of the five, and they are “very dynamic” — as well as a new crop of shows. That list includes Succession, a series by U.K. comedy writer Jesse Armstrong about a Canadian media magnate who on his 80th birthday decides to renege on plans to hand over the business to his second eldest son.

“Think of Dynasty for smart people,” Plepler said.

He added that Lovecraft, a horror genre piece with racial overtones set in the 1950s from Get Out writer and director Jordan Peele and Misha Green, “is one of the most arresting scripts that I’ve read in the last 10 years.”

And he also has high hopes for a new Watchman series, loosely based on the movie, from Lost and The Leftovers creator Damon Lindelof; Paterno, a biography of the late Penn State football coach starring Al Pacino; and a remake of Ray Bradbury’s Fahrenheit 451, “which I think is quite timely.”

Plepler is optimistic for HBO and the industry. He is most encouraged by the fact that after all these years — HBO debuted in 1972 — artists, writers, actors, directors and just people with ideas continue to flock to the premium channel.

Netflix’s emergence has also inspired and invigorated what is already a highly motivated company. “There is not one scintilla of complacency inside our buildings,” Plepler said. “Feeling like underdogs is not an unreasonable feeling, even as well as we’re doing. … We want to have the insurgent spirit that got us here in the first place, and we don’t want to let up.”

For Plepler, that means HBO won’t stop taking risks and won’t slow down as it winds through the ever-twisting competitive landscape. “Let’s put our foot on the accelerator,” Plepler said, delivering content to audiences that they can’t get anywhere else. “I’ve been here 25 years and I have watched different iterations of our growth and of our evolution,” he continued. “I’m more excited for the future of this company than I’ve ever been because I see the line at the door and I see the opportunity for growth.”

For Comcast Cable CEO Neil Smit, it’s always been about the team.

In each of the past jobs he’s held — as a cable company CEO, a marketing team leader at AOL and on a Navy SEAL team (he retired from the elite military unit as a lieutenant commander) — the most important aspect of the job has been the people that surround him.

That’s never been more true now as head of the Comcast Cable division for the past six years, Smith said. It was even obvious back when he first met with Comcast’s top brass — chairman and CEO Brian Roberts and then-chief operating officer Steve Burke, now the CEO of NBCUniversal — about possibly running the cable unit.

“My wife and I came out to meet Brian and his wife and Steve and [his wife] Gretchen Burke and the rest of the team and their spouses,” Smit said. “I asked her on the way home, ‘What do you think?’ She said, ‘I think they are good people with good values and you prefer working in a team environment.’ I felt the same way. That’s been the best part about being here, being able to work with that team day in and day out.”

Teams have been a big part of Smit’s career through stints at Nabisco, where he was a regional president, a five-and-a-half-year tour with the SEALs and at AOL, where he oversaw that company’s Internet access business. Smit also spent five years as CEO of Charter Communications, building up that midsized cable operator and steering it through a bankruptcy that freed up its crushing debt load and allowed it to invest in the business, a move that many believe laid the foundation for Charter’s success today.

He joined Comcast in 2010 as president of its cable unit (he was named CEO in 2011) and began setting the stage for what could be the first full year of positive video customer growth in a decade for the nation’s largest MSO. For that performance, Smit has been named Multichannel News’s 2016 Executive of the Year.

Related: X1: The Rocket Fueling Comcast Growth [subscription required]

‘LASER-FOCUSED’ EXEC

“Neil is one of the best and most thoughtful leaders I know,” Roberts said in an email message. “He’s smart, strategic and laser-focused on execution. He’s critical to our growth and evolution — driving our product innovation and transforming the customer experience.

“His passion, focus and optimism these past few years make him truly worthy of this wonderful and, in my opinion, very well-deserved recognition,” Roberts said.

Smit, in typical modest fashion, defers most of the credit for Comcast’s success to the cable company’s employees. But that sense of collaboration has been with him throughout his career, whether it be in the military, where the people that surround you make literal life-and-death decisions, to the business world, where the right team can mean the difference between success or failure.

“For me it’s less about the work and more about the people I get to work with,” Smit said.

But make no mistake about it, the work is important. Roberts crowed days after Smit was hired back in 2010 that the new cable division president came into the office on the weekend before he was officially supposed to start just to listen in on customerservice calls. It was a habit that Smit picked up when he was at AOL and brought with him when he took over Charter in 2005.

He still does that today, he said, adding that he makes all of his senior managers — including himself — follow up personally on service calls. When a customer gets a callback from Neil from Comcast, it could very well be Smit on the line.

Smit said he makes about three customer callbacks a week. “I think it’s important to stay in touch with the customer,” he said.

Keeping a sharp focus on the customer experience has been Smit’s mantra since he came on board, and it has paid off in spades for Comcast and its investors.

In the six years that Smit has been head of the cable unit — which accounts for more than 60% of Comcast’s total revenue and more than 75% of its cash flow — Smit has consistently improved the video and high-speed data businesses. In those six years, Comcast has improved video customer losses in 25 of 27 quarters, a pace that Smit picked up from Burke when he ran the cable unit, and high-speed data customers have increased nearly 30% in the same period.

At the same time, cable unit revenue has risen 33% since Smit joined in January 2010 and cash flow has improved by 35%.

That customer focus and the power of its state-of-the-art operating platform, X1, has led to six consecutive years of improved video subscriber losses. This year, Comcast is expected to report its first full year of video customer gains in a decade, with most analysts predicting the cable operator will add at least 100,000 basic video customers for 2016. It would be the cherry on top of a six-year period in which basic video-subscriber losses have been reduced 21-fold, from 756,000 in 2010 to just 36,000 in 2015.

Smit will give most of the credit to his team, a seasoned cadre of executives that includes executive vice president and chief operating officer Dave Watson; and president, technology and product Tony Werner, as well as the thousands of frontline employees under them who have served as the foundation for Comcast’s success.

“From an operations standpoint, he has a great appreciation for detail, but he lets his team go ahead and get the job done,” Watson said in an interview. “He has a tremendous focus, but he lets you get the job done.”

MoffettNathanson principal and senior analyst Craig Moffett agreed.

“His real success comes not just from the fact that he’s a smart guy, but because he’s an exceptionally good leader,” Moffett said. “Comcast over the last five years has really upgraded its talent immensely. It’s a double-edged sword — an organization with lots of talent can easily become unwieldy unless you have a good orchestra leader who’s able to make everybody play together. That’s really where I think he has distinguished himself.”

GOAL-SETTING FOR INNOVATION

Straight out of the box in 2010, Smit challenged Comcast employees by setting a goal of at least one new product or service enhancement per quarter. Nearly 24 quarters later, the company has released dozens of new offerings, including Xfinity on Campus, a service that lets college students watch live TV and on-demand content on IP-enabled devices while at college; various “skinny bundle” offerings; multiscreen streaming video-on-demand offerings such as Stream TV; and others.

While Comcast has excelled on all product fronts — it added about 8.4 million broadband customers since 2010 and its X1 operating platform is considered by many to be the gold standard for the industry — video has been at the heart of the company’s cable success, dating back to Roberts’ efforts years earlier to bolster its on demand libraries and rights.

“At a time when everybody else in the industry was starting to coalesce around the vision of broadband first, Comcast kept their eyes on the prize of video,” Moffett said. “They never lost their enthusiasm for video as the core product. That’s not to say they didn’t invest in broadband, but they always saw themselves first and foremost as an entertainment company.”

Smit said he knew from the start that he and Roberts were on the same page.

“What’s great about working for Brian is he’s in it for the long haul,” Smit said. “He invests in the future, he believes in growth, he’s entrepreneurial and he’s up for new opportunities and new challenges. I’m a big believer in continuously looking for growth opportunities, whether it’s in people or platforms or technologies. We have a really good relationship.”

Video is just as important today, fueling new entrants in the SVOD and OTT space, as well as providing added fodder for mobile products from a wide range of competitors.

But programming alone won’t keep customers loyal, especially in today’s environment. Smit said that Comcast realized at the outset that it was the overall customer experience which fostered that loyalty. Early on Smit, Roberts and the rest of the Comcast team moved to drastically improve customer service, he said.

The efforts started out small. Comcast first guaranteed one-hour appointment windows for service calls and allowed customers to track technicians via an Uber-like app, for example. In 2015, Roberts unveiled an ambitious three-year, $300 million plan to build three new call centers, hire 5,500 customer-service representatives and revamp Xfinity retail stores across the country.

Smit said that the idea is to get staffing to the proper level — he defined that as having the right people taking the right service calls — which allows customer issues to be resolved more efficiently. That includes putting the right tools in the hands of both customers and service reps, including a knowledge-based system that prompts the best agent response to customer problems, overlaid with artificial intelligence that should improve the quality of responses even more. On the technician side, Comcast gives its workers better diagnostic tools to identify problems.

Even the network is getting in on the act. Comcast’s network is smarter, Smit said, allowing the company to restart a customer set-top box remotely to solve problems before they occur.

“We’re getting smarter — we’re getting more information from the set-tops and modems that we can leverage to make a self-healing system,” Smit said.

Comcast has also built call centers in Albuquerque, N.M., Spokane, Wash., and Tucson, Ariz., and has plans for additional call centers in Charlotte, S.C. and Fort Collins, Colo. Comcast also has hired many of the targeted 5,500 workers and has added additional enhancements to its service including access to Netflix service on its X1 set-tops.

“We can turn pretty quickly when we all get aligned around a product or a major initiative like this, the customer experience,” Smit said. “We do big things well.”

The numbers also speak loudly. In the third quarter, customer-service calls were down about 14% and Comcast’s on-time arrival rate for technicians improved to more than 97%. First call resolution of service issues improved by 7% and the company’s response time on social media channels has improved by 95% during the same period.

The Netflix addition to X1 was a milestone, as the SVOD pioneer has largely been considered to be a direct competitor to cable and a key contributor to the pay TV industry’s woes over the past few years. But Smit said the decision to incorporate the Netflix app on X1 boxes was easy: It was all about ease of use.

“I spoke with [Netflix CEO] Reed [Hastings] about six months before we got the product out and we got a deal done and released the product in that period of time,” Smit said. “The speed at which new content or new features or functions come out, you need to have the platforms in place to do that. In order for the cable industry to compete longer-term, it needs to have great content as well as a great user interface.”

NEXT UP: WIRELESS

Comcast’s next big investment likely will be tied to its next big product, a wireless offering slated for mid-2017 that will be created through an existing mobile virtual network operator agreement (MVNO) with Verizon Communications. Comcast created a wireless business unit earlier this year — Comcast Mobile, headed by former executive vice president of sales and marketing Greg Butz — to address the new product.

Comcast hasn’t given any details on the new product, and Smit wasn’t about to buck that trend. But he did say that mobile continues to be an important area for the company.

“We think leveraging our 28.5 million customer relationships, our 15 million WiFi hotspots and our Verizon MVNO is a good value and will continue to reduce churn,” Smit said. “[Customers] want more value and we think we can add value with the launch.”

Comcast has been less optimistic about over-the-top pay TV services. It has said it can’t see a viable business model there, even as services proliferate like Sling TV, DirecTV Now and Hulu’s planned OTT service slated for next year. Comcast is a part owner of Hulu through NBCUniversal.

Smit echoed Roberts’s sentiments on the issue, adding that for Comcast the economics of OTT are simply not as clear as in other products.

But the operator does see potential and value in one key component of OTT — the broadband network. Comcast has increased data speeds 17 times in the past 15 years as broadband consumption has increased 40% to 50% each year. Comcast has invested in new capacity, routers and DOCSIS 3.1, which promises Internet speeds of 10 Gigabits per second. On the programming side, NBCUniversal spent $3.8 billion to purchase DreamWorks Animation, a move that will add significantly to its content capabilities.

For Smit, those moves are merely another opportunity for collaboration and another chance for the team to prove its mettle.

“Brian and the team of us feel we can invest in the future of the company,” Smit said. “It’s a belief that the team can execute on those investments.”