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#002: HBO Magic

The method that HBO uses to create Emmy Award winning shows and how you can apply this to have the best advertisements on the planet.  I can guarantee you Ridley Scott would agree.

David Young:

Welcome to the Empire Builders Podcast, teaching business owners, the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector and, storyteller. I’m Steven’s sidekick and business partner, Dave Young. Before we get into today’s episode, a word from our sponsor, which is… well it’s us! But we’re highlighting ads we’ve written and produced for our clients. So here’s one of those!

[PEAK PTT Ad]

David Young:

Stephen, my notes say HBO today. Are we going to watch something? Are we going to talk?

Stephen Semple:

That would be probably more interesting? Let’s Put on, let’s put on some of The Sopranos.

David Young:

I haven’t watched the Sopranos in ages. Let’s do it.

Stephen Semple:

Or a little bit of Curb Your Enthusiasm.

David Young:

Oh, there we go. Yeah. There’s so many we could pick from,

Stephen Semple:

I mean, HBO is crazy. No one has won more Emmys than them. Like I was looking at it this year. This year, they’re down, this year. They’re a little disappointed. Because they’ve only got 107 Emmy nominations. Last year, 137. Like the next leader is like, 40. The number of Emmy nominations that they get year, in and year out is just crazy. But the thing everybody forgets about HBO though, is HBO also really dramatically changed the business of television. They were founded in 1972 and they really pioneered this idea of the modern pay-for-television. They were the first station to directly transmit and distribute to individual cable stations. So the first to make content and distribute it out to these cable stations. And it really became the blueprint for pay television that we use today. So they really changed the industry and they’ve gone from 1972 to today.

Stephen Semple:

Today they do $2 billion a year in revenue. They’ve become.. they’ve become a monster. But the thing I love about them is not just the changing of the business model, and we could do a whole thing talking about that, but a little bit about how HBO does things inside their four walls. And this is the lesson that. We can learn. And we see this… we see this portrayed in movies where there’s the pitch, right? And then there’s the focus group. And there’s the committee that approves the show. And frankly, that’s how most networks operate.

David Young:

A bunch of studio executives sitting around going, well, you know, I don’t know [inaudible 00:02:47] second guessing their creative people.

Stephen Semple:

Exactly. Here’s what HBO does. The producers and the directors have complete 100% autonomy. There’s no focus groups. There’s no committees. And you know, we should put a link in this to our other partner, Mick Torbay’s video on the committee.

Mick Torbay – Committee Video

David Young:

Yeah,

Stephen Semple:

Absolutely, watch it. It’s amazing… it’s fabulous. But here’s the thing. Here’s what their belief is. Their belief is if we go out and we hire the best producers and we go out and we hire the best directors and we go out and hire the best writers, they’re going to produce great stuff. So why are we having a committee or a focus group? In other words, people who don’t produce, don’t write and don’t direct determine what’s good content?

David Young:

Right? Right.

Stephen Semple:

And you end up with Curb Your Enthusiasm and The Sopranos doing that. You know, it’s really interesting. We all do this whole thing of, “oh, you’re the expert. I want to hire the expert” and then tell the expert what it is that they should or shouldn’t do.

Apple 1984 Advertisement

David Young:

It reminds me a little bit of the Apple ad, 1984. And people think of Steve Jobs as a great business icon, and he was. But he was a brilliant marketer, I think, first and foremost. And if you’ve ever watched the video of the focus group that people put together, they found a bunch of people that had never seen that ad, put them in a room, and then showed them the ad and said, “Hey, here’s what we’re thinking of running.” And people tore it apart. They’re like, “well, this is the dumbest thing I’ve ever…” And these were just average consumers. I think the thing to remember is that half of the population is below average.

Stephen Semple:

That ad, just for people… that ad just for background for our listeners, many marketing experts believe it’s one of the most effective ads that was ever written. And it was shown once. At the Superbowl, I actually remembered seeing that ad in the Superbowl. It had a huge impact. The focus groups panned it. The board didn’t want to run it. And here’s the thing is jobs hired Ridley freaking Scott to produce that ad. Now here’s the thing, Ridley Scott was a television advertising producer before he became a movie producer. He did some of like, if you remember the really great Chanel ads, those were his in the day. The guy knew what he was doing. So he goes out and hires him and the focus group and the board all go “Oh we don’t like this ad. It’s stupid.” and he says, “screw all of you. We’re fricking running it.”

David Young:

We’re doing the HBO play here.

Stephen Semple:

We’re doing the HBO play. This guy is the expert. He knows better. All you can eff off,

David Young:

Stay tuned. We’re going to wrap up this story and tell you how to apply this lesson to your business right after this.

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David Young:

Let’s pick up our story of where we left off and trust me, you haven’t missed a thing.

Stephen Semple:

This guy is the expert. He knows better. All you can eff off. You know, it’s kind of like people… and we see this in advertising all the time, people hire. They’ll go out and they’ll spend all this time and all this money. They’ll find who they think is an unbelievable advertising executive, great copywriter. Someone like yourself, myself, copywriting is the words. And then will sit there and go, “gee, you and I don’t know about this. And I don’t know about that.” And it’s kind of like…

David Young:

“We rewrote the ad a little bit…”

Stephen Semple:

Yeah. And, and they don’t even realize half the time the little bit of the rewrite is taking out of the magic. And I get why people feel like they can judge ads because they’ve grown up their whole life seeing advertising. So I know what advertising works, right? Well, you know what? Dave, I’m going to share a little secret with you. I haven’t told anybody this. I’ve lived my whole life in a house with indoor plumbing. That doesn’t make me a plumber.

David Young:

What?

Stephen Semple:

Does not make me a plumber. I don’t even have an opinion on what’s busted if the plumbing is broken. I’m not a plumber, even though I use it every day. Just cause someone watches, advertising or hears advertising, or thinks they know what works does not make them in an advertising executive. And in fact, some of our best, most successful ads are ones that we’ve actually had to work really hard to convince the client to run. And in fact, nine times out of 10 that’s when we’re sitting there and we go, “oh God, I know this is gold because everybody’s resisting.”

David Young:

And sometimes it’s about just getting noticed, right? If you’re in an un-sexy business… plumbing, you brought up plumbing. It’s like, there’s not a whole lot you can do as a plumber to make somebody need you today.

Stephen Semple:

Right?

David Young:

Right. Nobody’s going to respond or… I’ll say very few people are going to respond to some kind of a sale price on fixing clogged toilets. Because not many us have one today.

Stephen Semple:

Yeah.

David Young:

You’re always better off just doing something that’s going to get you noticed and remembered. You’re a plumber. You’re licensed plumber. Well, I know you can fix a plumbing problem. I don’t need to know that it’s drain-specific.

Stephen Semple:

I just want the water to go down the hole.

David Young:

That’s right. And I want it to come out of the faucet. I want it to come out where it’s supposed to come out and go away where it’s supposed to go away.

Stephen Semple:

Supposed to go away!

David Young:

That’s it.

Stephen Semple:

Not up the hole!

David Young:

In between those two things failing. I don’t really need you.

Stephen Semple:

This brings up something else. When you hire an expert, most of what works really well in marketing is counterintuitive. And if I hire an expert and that expert only gives me things that make sense, they’re probably actually not an expert. What makes them an expert is they deliver something that seems counterintuitive. The moment you go, “geez. I don’t know about that” means you’ve actually hired an expert and guess what? Do what they’re telling you to do. Give them freedom and autonomy to do what you’ve hired them to do. And then if they don’t get the results, then you fire them. But what you do is you give them the autonomy to do what they do. Be like HBO. No committees, no focus groups, complete autonomy to the expert.

David Young:

Do you know Stephen? How did HBO learn this lesson?

Stephen Semple:

I don’t know whether it’s always been this way. I didn’t… that’s a great question and when I was doing the research, I didn’t kind of have that question on my mind. It just… what jumped out at me was this massive success that this company has in terms of Emmy nominations and growing from nothing to $2 billion in their time and changing the industry and going, “oh my God, no focus groups, no committees. Isn’t that really interesting?” And I just like went there.

David Young:

Yeah, no, I think it’s great. And my guess is that companies like Netflix have, in their own way, copied this strategy. Right? And in the early days it was, “let’s find the things that people want to watch and show them to them.”

Stephen Semple:

Right.

David Young:

And then they started getting into their own production. And I think they take a fairly similar approach for the most part because the things that they are producing themselves are typically things people end up enjoying watching.

Stephen Semple:

Yeah, very much so. And again, a lot of this is counterintuitive and really what it means is trust the expert. Don’t ask your mom, don’t ask your neighbor. Don’t ask people in your industry. Hire an expert, trust the expert, get rid of the committees, watch Mick Torbay’s video.

David Young:

Amen. Find an expert and trust them.

David Young:

Thanks for listening to the podcast. Please share us. Subscribe on your favorite podcast app and leave us a big fat juicy five-star rating and review at Apple Podcasts. And if you’d like to schedule your own 90-minute empire-building session, you can do it at empirebuildingprogram.com.

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