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David Baldwin

David Baldwin

Interview Date: Thursday December 06, 2007
Interviewer: Steve Nelson
Collection: Cable Mavericks Collection

Part One of Two

Part Two of Two

NELSON: Hello, I'm Steve Nelson for the Oral and Video History Program of The Cable Center. Today is December 6th, 2007 and my guest is Dave Baldwin, Executive Vice-President of Program Planning for HBO. Dave, you describe yourself as a poor boy from Pennsylvania. Tell us about growing up.

BALDWIN: Well, I'm a poor boy from Pennsylvania trying to get by in the big city. I grew up actually in a very small town. We had three gas stations, three bars and one grocery store, but it was an idyllic childhood. It was one of those Saturday Evening Post kind of realities where you could go anywhere, do anything, as long as your home for supper. It was safe, we would roam the hills, we'd be out on our bicycles, pick-up baseball games – it was really a wonderful way to grow up.

NELSON: And what time period is this?

BALDWIN: This was... I'm a child of the '50s.

NELSON: Okay, okay, as am I. But what about TV at that time? You had three bars but what did you have for TV? I bet you didn't even have three channels!

BALDWIN: We had color bars, actually. We had one station that we could get clearly that was the VHF station out of Binghamton, NY just up over the state line, and it was one of those creatures that came about during the '40s and '50s, it was a tri-affiliate so we would cherry pick shows from CBS, NBC and ABC. Whatever they felt like programming is what they put on.

NELSON: Was this the best of, or maybe the not so best of?

BALDWIN: It was I guess whatever they thought they could sell and get the most money for their airtime. It was just the way I grew up and as I met friends in the '60s in college that had come from other communities they were talking about shows that I'd never even been aware of because they weren't offered. I thought we had everything, you know? But, interestingly, in the early '60s at the beginning of cable television, our community, because it was so isolated by the hills, it was down in a valley, we were actually serviced by cable pretty early. A guy, typical story, ran a TV shop in town and to sell more TVs he went up to the top of the tallest mountain around town, put up an antenna, strung wire all the way back into town and went door to door selling cable and therefore more televisions. So I was introduced to cable real early.

NELSON: And this was before you went off to college?

BALDWIN: This is actually... no. My parents didn't want to get it, they were perfectly happy. My father had spent a lot of time erecting this massive, like 50-foot antenna on top of the house.

NELSON: To get one channel.

BALDWIN: To get one channel, and it had guy wires attached to all four corners so it would be stable in the wind, and then the next step was of course he had a UHF antenna that he put onto the mast so now he could get the stations out of Scranton/Wilkes-Barre which was south of us but over a lot of hills. So he was all set up. Free is free, and he liked the way that he was getting it free and he saw no reason to pay this guy $4.95 a month to get the same stations which is essentially all that he was offering, just the same stations.

NELSON: Do you recall who this guy was or where he wound up being? Because there were so many guys that started in the hills and valley of places like Pennsylvania and went on to fame and fortune.

BALDWIN: I think he started and ended there. I think as a lot of these moms-and pops grew up he did what a lot of them did and sold out to the next biggest guy. I think right now they're serviced by Blue Ridge Communications.

NELSON: Okay, So you went to college, which was where?

BALDWIN: Penn State.

NELSON: At Penn State, okay, and people are talking about TV shows you'd never heard of – do you remember what any of them were?

BALDWIN: No, just that I was missing part of my backgrounds and history, I was missing part of popular culture, but fortunately it was the '60s and we were reinventing popular culture anyway, so it mattered less.

NELSON: And what were you doing in college? What was your area of study?

BALDWIN: In college... I actually went to college in my freshman.... I changed quite a few things along the way. I went to college thinking that I would become a chemist. I had a great chemistry teacher in high school and I did great on my chem boards, and I actually, whatever that word is, I jumped over the initial chemistry and went right into the second class. At the end of my freshman year when I found out that chemistry was really math in disguise and I was not that good in math, I decided, you know what? There's a war going on. I was not really keen on the idea of joining this war because I was brought up Methodist, I believe in thou shalt not kill, and actually all the teachings of the church, and I was shocked when the church started backing the war and it was like let me see if I can get these two ideas and get them together here. I said if I had to pick one which one do I do. I said let's go back to the original text here, thou shalt not kill and war is bad, so I parted ways there and so I needed a way to get out of going to Vietnam because there was a draft.

NELSON: I remember it well.

BALDWIN: At the time one of the professions you could choose, and I think it was morally right, if you were to be a school teacher then you were exempt from the draft. So the rest of my time at Penn State I spent as an elementary education major and looking forward to going out into the world and becoming a teacher, and then senior year 1970, '69-'70, we had the first of the draft lotteries. That was an interesting experience.

NELSON: Did you get a high number or a low number?

BALDWIN: I had a low number and let's just leave it there. I had a low number and I did not go to war.

NELSON: Okay, well, we're not going to probe into that. So what did you do, though?

BALDWIN: I actually came to New York. I had met a wonderful woman working together at a summer camp in Pennsylvania. She was from Brooklyn, there were certainly jobs in the New York City public schools, I applied. I started out teaching 3rd grade at PS 150 on Sackman Street in Brownsville-Ocean Hill, Brooklyn.

NELSON: So you've gone from small town in Pennsylvania, State College which is out there, as you know...

BALDWIN: Happy Valley!

NELSON: And now all of the sudden you're in Brooklyn?

BALDWIN: Um-hmm.

NELSON: This is culture shock, no?

BALDWIN: This is big time culture shock, but you know, a welcomed change because as you remember, Steve, the '60s were all about change. Everything was evolving or there was a revolution around every corner. 1969 is a year just taken in general. Every week, every month, something happened in 1969 that was the first of its kind. There's a man on the moon, people are being assassinated, everything was changing. So for me it was just like this is life.

NELSON: Go with the flow, right? As we used to say.

BALDWIN: Dive in, learn some new things, get yourself involved with other cultures. I had a diverse class of 65% black kids and 35% Hispanic, and then this white kid who grew up in the hills of Pennsylvania, this was quite a learning experience, let me tell you. It was a challenge but it was something that you felt good about because you were giving something back. But I won't kid you, it was not the easiest job I've ever had.

NELSON: Yeah, I wouldn't think so. Where were you living at the time?

BALDWIN: I lived in Brooklyn, a great old neighborhood called Park Slope that had just started to be gentrified and rows and rows of fabulous turn-of-the-century townhouses.

NELSON: You could actually get into Park Slope then, right?

BALDWIN: You could very easily get into Park Slope. Two doors up from where I found my first one-bedroom apartment was a project that Brooklyn Union Gas had actually done, renovating a brownstone to tell people, "Look, this is great housing stock here. If you just put a little bit of money into it, and we'll help you, we can revive an entire neighborhood," because it was left kind of fallow during the white flight of the '50s when everything was going on east of here on Long Island. All of the families, because "Oh my God, there's a black family that moved onto the block," were running out of the city.

NELSON: "We're out of here," right?

BALDWIN: And we're out of here. And then there was the banks doing redlining for financing. It was a pretty nasty period and so in the end, in the '60s, you ended up with really terrific housing that people needed, and then over the next two or three decades it's now to the point where I can't afford to live there.

NELSON: For people who don't know Park Slope, it's one of the most desirable places in Brooklyn, or in New York for that matter.

BALDWIN: It's well served by a subway into Manhattan, an island apart.

NELSON: Okay, so now you're a teacher. How long did that go on?

BALDWIN: It went on for seven years during which time I went to Queens College, got a Master's Degree in Library Science, specialty in Children's Literature, which was a lot of fun, and I became a school librarian first at a school down the street from where I was, took over that library program, and it was the era – I don't know if people will remember the Johnson years, but there were ESEA Title Grants that would go out to a lo of the schools in the nation. It was a time when the federal government really did support education. It wasn't just lip service; there were bucks. And we had in our district enough money if we pooled our resources to really develop first-class libraries in the elementary schools, and one of the things that we did was go out and buy as many films from Zagreb Studio, from the Canadian Film Board. These were very exciting new kinds of films that had no dialogue. They were telling stories just with pictures or with animation, and for kids that were really far behind in their reading skills, this was a great avenue into it because they did watch TV and they could form stories and they could tell stories. Here you get them in and then you have them watch an eight minute, ten minute film and tell you the story and write it down, and then give it back to them and said, "You just told me this. Let's see if we can read that now. Read your story. I'll help you." Listening centers – it was a time when reel to reel audio tape was transitioning into cassette tape and it was relatively inexpensive. What we would do is put together listening centers with a tape, eight of the same books around the table, and you'd start the tape and they would follow along. They would see the words, hear the words, and be guided. I had an assistant making sure that everyone's still on track, and it was fabulous. I was having the best experience in just three years of my teaching career running a library.

NELSON: So is this kind of broadening your view from the library guy, which is typically a very print thing, now you've got this whole audio-visual component going on, I'm suspecting here that this somehow led you in a new direction, so tell us how that came about.

BALDWIN: The tangents started at Queens College, actually. I had a great professor who was involved with a project called Art Doc. We were here in the greatest city in the world for art. Soho had just exploded and the big galleries downtown had room to show some of the most exciting art and so they were here. At the same time, Sony had developed its first black-and-white reel to reel portable video recorder. This is 1971-72.

NELSON: I remember it well because that's where I got started.

BALDWIN: There you have it. So as part of my education for being a librarian I signed up for this, it was a volunteer course, it took place Saturdays, we would meet at – I can't remember the luncheonette. I mean, Soho now has completely changed; it's all fashion and haute couture and stores mixed in with the galleries. Back then there was, I think it was called the Whistle Stop, where all the tradesmen, all of the workers that were still there – there were a few factories still left but most of them had gone – have coffee, go over to one of the galleries, either Meizel or somebody else, set up and have the artist come in – this was before opening hours – talk about his work, we'd capture it on video and then we'd go back to Queens and mix the audio and the video, dub it, and send it out to maybe 120 schools nationwide that had art programs, wanted to hear and see what's going on, but couldn't afford to send their students to New York City.

NELSON: So were these like half-hour programs or 10 minute...?

BALDWIN: Ran a half-hour to an hour, depending on how loquacious the artist would be, and some are very and some are not.

NELSON: Right, not very verbal.

BALDWIN: Yeah, sometimes their expression is on the canvas, but it really got me into... those experiences from librarianship, interestingly, and some of the books we were reading at the time about the transition of information technology, because librarians saw the future coming in terms of how information would be stored, how information would be shared, because it's their business, has been for a long time, and they saw the technological revolution that was coming with getting away from movable type, certainly, into computer generated text that could be easily printed and cheaply printed, and then even beyond that where you didn't even need a book, which is where we are today.

NELSON: So you picked up some of these production skills or were you working with somebody that did that?

BALDWIN: Rudimentary. I'm still not good...

NELSON: Well, at that time, all that was very rudimentary, especially working with the little reel to reel tapes and that Portapack.

BALDWIN: Uh-huh, and we had two decks and trying to get a clean cut on play and record and the switching, and it was like patience, patience, I think.

NELSON: Not exactly like the editing process today.

BALDWIN: Not an exact science.

NELSON: But did this kind of whet your appetite in any way for this whole experience for getting into something else? I'm still trying to find out how you made this leap.

BALDWIN: Ah, the dramatic moment?

NELSON: Yeah, the moment, right, right.

BALDWIN: The dramatic moment was in 1976, in the fall of '76. ESEA funding from Washington had pretty much dried up. The New York City public schools were going through an enormous change because of that, and the body of teachers they could afford was shrinking, and every year for '71, '72, '73, every year you'd come back and unless you were there in the system for eight, ten years there was always a question whether you had enough seniority to continue to be employed by the school. I had passed under the limbo stick two or three years in a row, but this particular year came back and "Sorry, we have to let you go."

NELSON: This was after how many years?

BALDWIN: This was after setting up, three years of this wonderful library program, getting to know every child in the school, where their buttons were, and just finally saying, all right, I've gotten up to the top of the hill and let's enjoy the view here for awhile. The idea that I wouldn't be able to stay there hurt, but then they said, "But we have good news. There is a library position open to you over in Bed-Stuy." "All right, fine. It's a do-over." I go over there and meet the principal and see the library, and it was everything that I had just set up. It was fabulous. However, to make room for me, they had to let go their favorite librarian who the kids loved, and another young person like myself. We were all in our mid-20s.

NELSON: Yeah, yeah, the budgetary triage here.

BALDWIN: Triage, and you know what? It was just an untenable situation. As hard as I tried, month after month, getting involved with the teachers, getting involved with the students, it was like "God, I just got over three or four years of work and now I've got to go into it one more time." And then one morning in April I kind of woke up, drove to work, got to school, looked around and said, "You know what? I cannot do this any more. There's got to be a better life. I don't want to be miserable, I want to do something that is rewarding and makes me happy."

NELSON: And also where you don't come in and they say well, thanks for the great job but no thanks.

BALDWIN: So I basically went down to the front desk and said, "I'm going home."

NELSON: You just walked in and said I'm outta here?

BALDWIN: "Will you be back?" "Eh, probably not." "This week?" "No, pretty much I'm outta here."

NELSON: So this really is this incredible turning point.

BALDWIN: This was the turning point that I think people who are unhappy in their job either get to or they don't, and fortunately I got to that and said, "You know what? I've put an investment in education, I've put an investment in this, but it's not payback. I need more out of life." So I just jumped and for the summer went out and had a blast, played tennis, bicycled through Brooklyn down to Coney Island, it was just fabulous fun and then my wife at the time reminded me, you know, you do need to get a job.

NELSON: Oh, that.

BALDWIN: So then I started the typical process of networking and meeting people and at that point exploring what am I going to do, where am I going to go? I know nothing! I'm a teacher! They're in short demand now.

NELSON: And you're looking for something else anyway, really.

BALDWIN: Yeah, but I started out looking for library positions because that's where it was and I went down to a private school outside of Philadelphia, told them my background – "Well, what have you done?" "Well, I've worked in some pretty tough neighborhoods in Brooklyn," and this is an old world, all boys, and I think all Protestant white boy, school. They didn't quite know what to make of me because I still had my '60s hippie hair and my wide watch band. I was of the moment. And so after a couple more interviews with library positions I started looking at what else is there in the world. My ex-wife and another woman were teaching at a private school here in New York together and she said, "You know, Dave's looking for work," and the other woman said, "Well, you know, my husband, he's in TV. Boy, he loves it. He really loves it." "Really? Would he be willing to talk to Dave?" "Sure, just call him up and come into the office. What could it hurt?" So I did. I called him and the fellow's name was Lee Deboer, who sooner or later you'll get his oral history, he was there early. He was working at a rep firm called TeleRep which was run by another pioneer, Al Masini, who basically changed the whole landscape of syndication television and how time sales was done. This was a first class outfit. They handled all A-list stations nationwide and they were just a Storm Trooper mentality.

NELSON: So why would they look at you? This was a real high-end...

BALDWIN: Well, because Lee was running one of the research groups and just because he was asked I sat with him, talked to him about stuff, and I said, "You know, where do you start out here in this field? I'm not trained." So he introduced me, or gave me the names of four or five research directors in the business and I called them up and arranged for an interview, and at one they had an open position and I remember the dialogue. I said, "I'm really not trained or qualified," and he said, "Well, don't worry about that. Nobody is. They come out of college, they don't know what they're doing. We train them on the job." I said, "Well, look at it this way – I know Library of Congress, I know Dewey Decimal. What have you got? Nielsen? It's all numbers; I'll figure it out." So I was coming into the field, actually, I was 28 years old at the time, I was older than the typical introductory research analyst at a rep house. They usually come right out of undergraduate and go right to work crunching numbers because it's all on paper, you looked at Nielsen books, eye strain was a big problem. You would run endless amounts of numbers to do estimates for your sales people who would then go out and make calls on Madison Avenue to sell the airtime. It was a great game, got involved totally in reading all about television because it was foreign. The business of television, I never thought behind it.

NELSON: What did you know? You hardly even watched television in your earlier days!

BALDWIN: Exactly, exactly. Someone... I'm trying to remember the author – a very influential book someone just passed along to me, it's called The Business Behind the Box, which is I think great reading for anyone that's going into commercial television. This is going back to the basics of how do we make our money, and so I kind of understood it from there, started reading the trades, it was kind of like taking my own college education...

NELSON: And you knew how to do that.

BALDWIN: Ingesting information, and a year and a half later I'd been promoted, I was a manager and I had staff working for me.

NELSON: What was the name of this place you were working at?

BALDWIN: This was a place called HR Television which now is...

NELSON: Get that on the record.

BALDWIN: Yes, on the record. Wonderful, innovative people. Now the company's called SelTel, clever, S-E-L-T-E-L, get it? Sell Tel? So their big thrust when they purchased HR was that they were going to computerize the business, take it away from paper and change everything. Transition avail sheets and transition posting – all of that stuff, and they made a really good run at it. Unfortunately they were a long list rep; they didn't really have the power in the industry to have people follow them. They had to wait until everyone else, CATS and the rest of the folks, kind of grew up around the concept. But it was a great place to start. You certainly learned how to be creative with numbers, put together a pretty good... and back then we did one-sheeters to give to the salesmen and they were clever little things that you'd want to focus on, either a demo victory or an increase in the time period and then you'd put a little graphic on it and give it to the salesmen so they could drop it off.

NELSON: Something to latch on to other than numbers.

BALDWIN: Yeah, something to latch on to the primary concept. That was the creative side of the job, but otherwise it was crunching numbers.

NELSON: I'm getting the impression that the crunching numbers probably over the long run maybe that didn't sit that well with you.

BALDWIN: It was okay but I didn't want to live my life doing this on a calculator. So a year and a half later, it was summer, late summer/early fall, mid-fall of 1978 – this same fellow, Lee Deboer, had moved from TeleRep, had been hired by Home Box Office to start their real research efforts because up until '77 they basically had no research effort to speak of. They had a fellow by the name of Les Dorney who had come down from Time, Inc. He used to be the research director of Life Magazine, and of course Life was in a downward spiral at that time, they had to let a lot of people go, but Les was a lifer that was sent down, as many, by the way, of the executives that started HBO were actually sent down from Time, Inc. to keep its eye on this new business that these kids are starting up, "We don't know much about it."

NELSON: Time, Inc. didn't really know what to do with, perhaps.

BALDWIN: Exactly, but they did have some executives, both young and seasoned executives that they would send down and populate the executive ranks of HBO at the time. So Lee was given a budget because they were looking forward to 1978 where it was projected we would turn our first dollar profit. This is a business that started in '72 and was running six years under water, and it's amazing to think about that sort of business startup today, something that had that much capital investment to go that long without making a dollar for your parent corporation. Doesn't happen that often.

NELSON: That would be shut down quickly.

BALDWIN: That would be shut down, I don't know if it would make it past year three. But there was money and so Lee went out and hired a few folks and the research group was formed at HBO. One of those jobs was mine because I came over and essentially I had to meet two or three layers of management, it seemed to be a good fit, and all that I'd been reading about in the trades since I started working in television for 18 months was how fast cable was growing, how fast satellite-delivered television was growing, and that the king of the hill, of course, was Home Box Office. It was the hottest, fastest brand in America in terms of growth and was something that a lot of people really wanted.

NELSON: So this was from your standpoint what a great place to land.

BALDWIN: This is my dream! No more ads...

NELSON: Get rid of that part of it, right?

BALDWIN: No more fabrication of lies, damn lies, and statistics. What a unique experience! I had 25 stations at HR, here's one station I can know everything about, and oh, by the way, management is only interested in finding out the truth.

NELSON: This is shocking!

BALDWIN: What are they watching, what do they think of the product? Just figure it out, tell us where to go, what to do. You are the eyes of the corporation and the ears. Get the information and we will change it in whatever direction you say. How can you turn down a job like that where you've gone from being the low man on the totem pole to now you're right up there with the executives in the top echelon having dialogue about what's going on.

NELSON: So they really were driven by trying to really understand what their viewer or what the consumer wanted as opposed to fudging that a little bit because you're trying to push advertising.

BALDWIN: From the outset because it didn't sell advertising. It was driven by the consumer dollar. The whole goal was to try to figure out how to make it stick. Once you're in the home how to keep them subscribing, what was it about the experience that they liked, and from the outset we didn't show things just once a week. The paradigm turned on its head. Commercial television that we all grew up with up until that point, the Sullivan Show was on Sunday night and you'd wait until that night; Twilight Zone was on Friday night, you'd wait until that night for that show, and you'd watch it through the season and then the summer rerun season would come back. They'd show the 26 back episodes all over again and then you'd start the new season. But HBO because of the nature of the programming, you've paid your money, if I just showed Saturday Night Fever one time on Sunday night at 8:00 and not again until six, nine months later, well, that would be a pretty... remember, VCRs didn't exist when we started. There was no way to capture it. So our paradigm was no, they've paid for product, give them opportunity to use it.

NELSON: This is a kind of rudimentary time-shifting in a sense. You can find it at other points in the day and the week.

BALDWIN: Exactly right. So we would set up one of the initial pieces of research, once we got set up with diaries and we worked with Nielsen and we started keeping real time period information, was how do you optimize a flight – this is kind of like ad grad school level – how do you optimize a flight of a show, not a 30-second spot, to reach as many demos and increase the cume audience as high as you can without getting to a point where the majority of audiences are now looking at it as an annoying repeat. What are the nights, what are the times, what are the demos you're going for, and it was great fun to figure that stuff out.

NELSON: But nobody had really programmed that way before so you had no models...

BALDWIN: No, didn't have to, didn't have to!

NELSON: So you have no models of looking and saying this is how you do it, you run them x number of times, and you do a Monday and a Thursday and a Sunday night and whatever. So you were really inventing this whole process of repeats.

BALDWIN: Well, certainly the folks before me were the inventors.

NELSON: That was underway when you got there.

BALDWIN: It was underway. Ours was to tweak it. They only had a limited amount of inventory and they had to fill up a lot of time, which is another interesting thing, when I joined the company in 1978 we would sign on in the afternoon at 5:30 or 6:00 and sign off at 1:00 in the morning.

NELSON: That was it.

BALDWIN: There were very few 24-hour stations. If you think back to the '70s, most broadcast television said goodnight after the late movie and came back on in the morning. So we felt no urgency to get there until... capitalism and competition are always good. There was a channel called the Star Channel and from its inception over at Warner AMEX they were a 24-hour movie service which put pressure on us. They ended up actually owned by the folks that owned Showtime, and that was their wedge into the pay industry because HBO had the lion's share and Showtime and The Movie Channel wanted to come in and see if they could grab some of that business share away from us and one was we're a full-time 24-hour service.

NELSON: And was that available on cable, Star?

BALDWIN: Yeah. But that morphed into The Movie Channel rather early.

NELSON: You talked about working with senior management when you got to HBO. Who was the senior management at the time? Tell us about some of the people and personalities.

BALDWIN: Oh, wow! Jerry Levin, who we all know the history at this point, Jerry Levin was Chairman, CEO of HBO at the time. His head of programming was a fellow by the name of Austin Furst, who was there at HBO during my tenure in research and then went off to form the company called Vestron which was one of the initial movers in the home video market. He was so successful at capturing rights for movies because he knew what the game was. Austin was a brilliant, brilliant man – still is – and went out and captured an awful lot of rights and sold an awful lot of cassettes at very expensive prices into that burgeoning market of home video in the early '80s, so much so that he actually produced a couple movies, the most famous of which was Dirty Dancing, but that was the end of his movie making career. He was a better businessman than a mogul. Working for Austin was Jay Walkingshaw. I think Jay was one of those bright folks that you found in Time, Inc. back then where they would go out and they would just sweep the college campuses and they'd hire the best and the brightest. So he was a very, very sharp businessman. And Lee Deboer, of course, the head of research was absolutely one of the best researchers I've ever met from then 'til now, just a steel trap mind, totally logical and he would go for the logical conclusion and if he didn't have enough information he'd know it and go back and find it. At that point, let's see, who did we have? Arnold Huberman, a name that probably is not mentioned too many times, was running our film acquisition department.

NELSON: And that must have been important because movies were such a big piece of HBO at the time.

BALDWIN: Were and still is a big foundation of premium television. But he transitioned out after two or three years after I was there, and I think '81, '82 we brought this executive in called Steve Shaffer who then solidified HBO's film buying with Michael Fuchs who had come in and taken over the programming department. Between Michael and Steve they kind of figured out that the real long-term future of the business was not in buying slate movies – which was when you'd go and here are the movies that they've released last year, we need all 15 and here's the price, and you'd do that over and over every year – but to go to a studio and say, "Look, I know you're going to make 15-18 films over the next five years. I'll take every one. Create the formula, you'll be covered, we'll be covered and we know that we'll have a movie inventory." Those were the two guys that kind of figured out long before the guys at the studios did because we were incremental to their business at the time. Their business at the time was still in theaters and their big dollars were coming from the broadcasters and there was no video window. So we just added a few dollars on top of the purse.

NELSON: But your window did get inserted in that?

BALDWIN: This is the genius of the fathers of HBO, I can't claim any credit for this, but our window came before broadcast window and before it got chopped up, all the naughty bits cut out and all of the commercial black inserted. So that was an advantage for us and they were happy to do that because at the time we were only 2, 3, 4 million subscribers which in contrast to the rest of the country wasn't going to hurt their broadcast sales too much. But once that pattern was set it was very difficult for them to back off of it. They actually tried to invent their own HBO. Four studios got together and said, "No, no, we didn't mean to do that. HBO is a middleman, too much power, too much leverage. You've now got 8 million, 9 million subscribers. We want to start our own service." And it was a very famous court case and we prevailed because basically the evidence showed that they were trying to exclude us, keep us from doing business and actually putting us out of business by starting up a business. They would feed their own movies to them early and then give it to us used.

NELSON: A little self-serving restrictive trade there.

BALDWIN: So they couldn't do premium television but they did come back in spades when the VCR was invented. They figured all right, this window I've got to put in front of HBO. So that was a beginning of the sequential distribution model that is now an enormous sequence of things and it's being played with back and forth. Even guys like Netflix now are into the mix for acquiring exclusive, first premiere rights off theatrical.

NELSON: You mentioned the VCR. Talk about that and what kind of impact that had at HBO when that started in the early '80s really proliferating in the marketplace.

BALDWIN: Well, it was a serious threat to our business obviously because it was pretty easy in those days to start a little mom-and-pop video store and people were getting into that business, 7-11s and the like. Instead of buying HBO, and at the time I think our prices were probably like $7.95, $8.95 a month, you could go in and rent a movie for $1.99 a night. Maybe you only want to watch two or three movies so the dollar economics in terms of the guy that only watches movies was like, well, why don't I just get a VCR and watch the movies I want before they get on HBO. So that really was a disadvantage that of course we turned into an advantage, which was all right, how do you beat that? Well, you buy more material and you present more material that they can't rent. So that's when Michael Fuchs basically said, "You know, we've got to make our own movies." He went out and formed HBO Pictures and we were making 6-8 movies a year with top talent. Remember Between Friends? We got Elizabeth Taylor in 1982 to make that.

NELSON: Now how did you... you probably weren't directly involved in that but that's such a seminal moment because HBO became so known for being able to attract all kinds of talent in front of the camera, behind the camera, that you just wouldn't think of as working for some TV network, and cheaper than...

BALDWIN: It was hard because the vernacular for actors and actresses at the time was that a television movie was a far lesser platform than a theatrical and many of them just didn't do TV movies because TV movies, traditionally, were disease of the week. They were designed for females 18-49. It was either disease of the week where someone in the family got sick and someone had to prevail and doctors and medicine and hugs and kisses and tears and roll credits.

NELSON: Very formula.

BALDWIN: Yeah, or they were woman in jeopardy which was the other formula. Somebody's a stalked or somebody's outside the window – whatever it was – and they were pretty much churn them out, grind them out movie of the week. In fact they were called MOWs, Movie of the week. Michael said "We're going to make them differently. We're going to fund it differently. We're not going to obviously put commercials in them and they can have real solid interesting stories." That started the run. We had already established ourselves with original programming with On Location, the standup series, and SRO, Standing Room Only, which was our music series, and throughout the period of '76 through '81 or '82, we were funding one a month of a comedian and a music show which was the underpinning, really, of HBO's entertainment original programming, which was exclusive, ours, couldn't see it anywhere else on HBO. And that meant a lot: for the people that liked movies but wanted more there was On Location and SRO, and then of course Inside the NFL which is now 31 years old was up and running back then in the football season, we had a baseball series called Race for the Pennant which did the same thing for baseball as Inside the NFL did for football. And then under Dave Meister and Seth Abraham we started the boxing program at HBO which was picking up again some rejects from commercial television. They were getting out of the boxing business so we jumped in and said, "You know what? Prize fighting is for us," and reinvented the coverage of the sport and became one of those other attributes that you could now, along with the movies and the comedy and the music and the sports, you could get live boxing on HBO, and reinvented the whole thing. Remember Gillette Presents on Friday night? It's a perfect sport! Three minutes of action, two 30-second commercials and back to the action, and that was how they made a lot of money. We didn't have commercials.

NELSON: So what do you do between rounds?

BALDWIN: We go in the corner, we get tight on the boxer, we get tight on the trainer, we listen to the dialogue, we listen to what the trainer is telling the boxer, and do some analysis and then do a little bit of highlight and then back to the ring.

NELSON: And so for the sports fan you're seeing something in a completely different way.

BALDWIN: That you'd never seen before. No one can have seats that close and can actually listen so that really put us on the map. During the '80s it was really one of those golden periods of boxing.

NELSON: Let me ask you, where are you at this point? Are you still doing your research, or you've moved up somehow or other in the organization?

BALDWIN: I spent 3 ½ years doing research, from when I got there in December of '78, and then a position that I knew I wanted after doing all this research on what people watch, when they watch it, how they watch, I wanted to not be the provider of information, I wanted to be the recipient and the decision-maker and the best job I could ever imagine since all the way back in repping was to be a scheduler because I could see the flow of audience and I could see how back in local television if you could stack your early fringe with the right programs that captured demos and flowed them, you're in the catbird seat. You can control two hours of television if you can put the right things there and get the right demos, and in HBO I figured, wow, what a great game because it's not so much audience flow but it's this great intricate puzzle of how to optimize the viewership, so I wanted that job desperately. Ruth Beltran, who had that job, made the decision that she would go back to business school and get her MBA, and I heard that and there were skid marks outside my office. I went to see Mack Perriman who was in charge of program scheduling operations at the time, and I basically said, "Mack, I want this job."

NELSON: And this wasn't even posted yet, I assume.

BALDWIN: No, it wasn't posted. He and I had worked together, and Ruth and I had worked together. But Mack was very old school about such things as hiring and interviewing and all that stuff. As close as we were, he put me through the formal interview, the luncheon interview, we even had a dinner interview.

NELSON: Like you'd never been around this place before.

BALDWIN: Do you know who I am? Do you know what I've been feeding you?

NELSON: Let me introduce myself, right?

BALDWIN: I said, "Mack, there is nobody on the planet that's more qualified for this. Come on! Hire me!" And he did, and I got the job running scheduling for HBO and Cinemax.

NELSON: Now I want to talk about scheduling because this is something a lot of people don't really know a lot about sometimes or focus on, and you've used an interesting metaphor so allow me to repeat it for you – you've used the word puzzle before and it is a puzzle, and people of course familiar with a crossword puzzle which has a series of white spaces where you fill things in and little black boxes that tell you, okay, one across is going to be five letters so think in those terms – you've used the metaphor of the diagramless crossword puzzle which some people may not know but you look at this puzzle, there's no black squares, it's all white so you don't know whether one across is three letters or six letters. So you're really starting with this blank slate and trying to create this complicated series of what goes where.

BALDWIN: I've used that analogy before because every month of programming, at least back then, was composed of different movies. You didn't have a lot of series back in the '80s or '90s, and even today we don't have a lot of series programming that takes a regular spot every week. So we're left with 24/7 across the primary channel and then six other plexes on HBO, eight channels of Cinemax, where you have a certain number of anchors. We anchor our movie on Saturday night. At least that's the two letter answer on a diagramless where you say okay, it's either "an" or "on". I've got a movie there, so that's what I'm going to start with and then you start filling out the rest of it. All right, if I start it there I'm going to put my movie through a time tested rotation, Saturday to Tuesday and then the following Sunday because I know that's the broadest sweep, research again, that I can possibly capture with demography. And then I'll fill it in a couple of other places depending on its MPAA, depending on its genre, whatever fits. The rest of it is unanchored and kind of the diagramless puzzle comes in again. Boxing, given that we know that they are boxing, where they're boxing and when they're boxing, which is often not firmed up until we've already published the schedules, unfortunately, and then we have to republish the schedules, but boxing is a Saturday night event for us. As it evolved, series generally are a Sunday night event, and those are the four or five anchor positions and then everything else has to be put in rotation across the main service and then decide how many other channels am I going to play this on and what time periods. I never played the game. That's the problem with the rap on Dave Baldwin. When I came into the scheduling department I was at a director level and the managers actually did the scheduling. I came from research, my job was to oversee and to prompt them into next levels of expertise. So interestingly, although I've run this thing for 25 years or more, I never scheduled a thing.

NELSON: So you're like the guy that manages the baseball team and never played baseball.

BALDWIN: Exactly right, but you know what? I went out for several days – because what we do with our schedulers is allow them to stay home with all the data, all the research so that they don't have to take calls, they don't have to engage in conversation, they don't have to do anything except focus on this puzzle and make sure it fits because you're trying to fit odd pieces. They're not all 30s and 60s and two hours. Movies these days either run 87 minutes or 2 hours and ten minutes or 2 hours and 18 minutes, and if you have a rather regular schedule for some of the stuff and if you have an irregular time period for the other stuff, sometimes you have to do the puzzle two or three times in order to make the pieces fit. So on their first day of scheduling they're allowed to stay home and focus on it, then they turn it back over to the rest of the team and then they massage it and the process is an iterative one. Back in the time when they were doing that, when I moved over in '81, there were no computers. They had huge pieces of paper, calendars and a couple of dozen No. 2 pencils.

NELSON: And a lot of erasers.

BALDWIN: Gum erasers, yeah. The little stubby eraser was not going to do it, so they had gum erasers and literally a shopping bag full of information on how new movies had played before and they went about doing the puzzle on a calendar with show after show after show. I knew enough to say, you know what, I don't type and I don't want to do that, but I'll manage the process.

NELSON: So you say, that's a good job, or we'll approve that, okay, that's July, we'll take it!

BALDWIN: But more importantly what it taught me right away, and I learned some of this from teaching, from research, and now going into scheduling, motivating and managing are really what you get paid for. If you can do that, if you can manage well, life is good because it's all about the people. I knew right away that Amy and Doug Lee – Amy still works for me, by the way.

NELSON: Amy?

BALDWIN: Feldman. She's the Senior VP of HBO Scheduling and Administration now, been with me since day one. Doug Lee who was there running Cinemax has had a great career. He's at MGM now managing all of their digital initiatives, their channel that they just launched in HD, and I had drinks with him just the other night. This is family. These people kept me straight, kept me on top of things, loyal, and all I had to do was put the right tools in their hand and reward at the right time and it was like, yeah, I like this management stuff. It's kind of like teaching except I don't think either one of them are going to steal their lunch money and there was no fighting on the playground.

NELSON: Well, you make it sound like this isn't really work but of course it is.

BALDWIN: Well, it's work, but you know what? It's honest work and it's fun work and it's the kind of work that I started to enjoy right away, managing people and processes, and then being a translator, taking all that they were doing and then going out to the floor and out to the executive suite and kind of selling the ideas, selling what we're doing, explaining the strategies, the tactics and the like. In essence I found a career that was very teacher like but a lot better money.

NELSON: For sure. Now you mentioned in terms of the scheduling that you had certain anchor things you could plug in there and I just want to focus on a couple of those. The Saturday night movie – that became a signature. How did that come about?

BALDWIN: Not until 1991, interestingly.

NELSON: So until then the movies were much more amorphous, they go here, it goes there?

BALDWIN: Well, you have to know that one of the games that I learned when I came into television that I'd never learned before was backgammon. Backgammon, if you're just going to play for fun is an okay game, you're moving pieces around. If you're playing for money and playing with the cube there's an awful lot of strategies and tactics, and sometimes the more complicated you make it the other guy across the table can't quite keep up with the four moves ahead that you have to play in the point counting. I took that to HBO, that gaming mentality, and throughout the '80s we really gamed it out to... it was a summer month, the hut levels were higher later, we'd move our movies to 9:00 starts instead of 8:00 starts. We pretty much abandoned... we played a lot of our movies with Sunday starts, Wednesday and then Saturday plays, but as the television environment shifted we would sometimes premiere them on Saturdays because the Sunday competition from the networks was killer in-season, in the fall and the winter. So we started migrating some of our movies over to Saturday and of course as soon as rerun season would begin again we'd move it back to Sunday. So while we were trying to finesse according to demography and all those skill sets that we had and all that, the consumer was totally baffled. They had no idea when movies were starting, where to look for them, what the hell is going on and that confusion started being fed back to us in the marketing research. So Amy Feldman came to me one day and she said, "Dave, I've been thinking. What's the worst that can happen if we take all of our new movies and we just anchor them in one spot, Saturdays at 8:00, that's our spot. Wouldn't that be easier for everybody?" This great light bulb when off over everyone's head – well, of course it would! What's the downside? So we invented the HBO Saturday night guarantee, got the marketing folks involved in it and they actually spent in the first year an ungodly amount of money. Remember, this is 1991; they spent 18 million dollars in off-channel advertising about the HBO Saturday night guarantee movie.

NELSON: Just to say, Saturday at 8:00, you be there.

BALDWIN: It was a guarantee and we hung in there through hell or high water, and I had big fights with the guys that were running HBO pictures because "No, I can't possibly play this film at 8:00, it's too early!" "It's not too early for a theatrical. Why is your film so precious? It's going on at 8:00." So it actually changed the nature of our business and a lot of the strategies because a year or two later, after we had established that beach head, we then went to multiplexing and in the world of multiplexing you needed at least some signposts of where things are because now you have an awful lot of programs. There's no system that a consumer can understand our schedules other than do you have what I want right now. So we persisted with the Saturday until we got to the late '90s and then Sundays with series was pretty much along the same lines. Chris Albrecht and I had been talking about where we put our series because you remember before that, in the mid-90s, The Larry Sanders Show, that wasn't a Sunday show, it wasn't a Saturday show. Larry Sanders was a Wednesday show. We had other series that would be a Monday series. And we looked at the opportunities that presented themselves after we launched The Sopranos and after we launched Sex and the City that we could string together probably 26 to 30 weeks by co-oping the Sunday time period and just running a new episode all the time, and we knew we had another series called Six Feet Under coming in. So it was the first time when it became evident that we could with different series own a time period, something that had never been done before. Again, kind of looked at the network schedules which had shifted away from series forms, and all the networks in the late '90s were getting into long-forms again. They were back to buying movies, making movies, and they were really fading in terms of putting their best series on Sunday nights because they wanted their good series mid-week, Thursday particularly because that's a great advertising night because it's the springboard to cars and movies and shopping.

NELSON: Advertisers love Thursdays.

BALDWIN: Yes, they love it.

NELSON: And you couldn't care less about the advertising side.

BALDWIN: Exactly. So Chris said let's just try to own Sunday.

NELSON: So this came from Chris?

BALDWIN: Yeah, he was, although a programmer, he was probably my best boss when it came to tactical scheduling even though he didn't grow up in the discipline. He was a comedian, a nightclub owner, an agent. I would sit with him and he would come up with these fabulous ideas. I'd say, "How did you come up with that? I'm embarrassed that I didn't come up with that! You pay me to do that!"

NELSON: "Can I take credit for it?"

BALDWIN: And I did, I did. Chris, if you're watching, genius! So that's where we are pretty much today. We're right now in a stage where this whole information technology thing is exploding, we firmly believe that there is purpose to having some established anchors, not too many because the consumer's inundated and you can't ask them to remember too many things, and we don't. Just remember our movies are on Saturday and our series on Sunday. Good, we're done. Everything else I can play multiple times on multiplex, I can put on HBO On-Demand, or you can use your DVR and just set up and record the series and capture it yourself.

NELSON: Which is a lot easier than the VCRs which were in a way your enemy back then because programming them... I mean, there were efforts to say, "Use your VCR. You can see this movie that's on at 3:00 in the morning and record it," but of course we know that people were largely baffled by that.

BALDWIN: I remember those efforts. I think that was one of the Showtime ideas, but the fact was at the time most of America had a VCR on top of their television blinking 12:00, 12:00, 12:00. They didn't know how to set the clock, they certainly didn't know how to use a splitter and put it into the VCR and into the television, so whatever they taped had to show up on the television, and nobody was smart enough when they set it up to tell them about the splitter.

NELSON: The DVR obviously changed that. But before we leave Sunday night, not that we ever leave Sunday night at HBO, I just wanted to go back to that for a second. Was it really first Sex and the City and then The Sopranos? You had a strategy but you had to have the programming that would make that work.

BALDWIN: Yes, we had to have the programming that worked and the first thing was to make sure that we had a sequencing of these shows coming in. We didn't go for 52 weeks right out of the block but we did use, interestingly back then, the idea of reruns to lead into first runs. So if we were in the 3rd season, let's say, of Sex and the City I could use last season's 12 episode doubled down for an hour in six weeks to lead up to it. So you'd fill in between seasons until we got to the full inventory phase of '99-2000 where it was just hell's a popping. We had the three S's – Six Feet Under, Sex and the City and Sopranos that are sequenced out and you could just sense the flow going through the whole year and you transition from one hit to another hit to another hit. It was fun.

NELSON: And why 9:00 instead of 8:00? Primetime typically starts at 8:00 but you always picked that 9:00 Sunday night. It seemed to be the fulcrum point.

BALDWIN: There were many, many reasons. Tactically, in the fall you never get to a clean 8:00 because of the overruns from football which CBS loves because that pushes 60 Minutes and if CBS can push 60 Minutes that means they can feed their next show and their next show and their next show. So that's a phenomenon that will never stop. And you have the sense that a lot of our shows were adult in nature and meant for grownups and parents, and by 9:00 at least if they weren't in bed, the young'uns were at least out of the room where mommy and daddy were going to watch TV, and the demography shifts, it gets younger. The earlier hours, 6:00-8:00 really dominated by the 50+ demos. As you get later in primetime, 9:00-10:00, you start seeing more of the 18-34s come on the scene and be available, and a lot of our shows, obviously, had great appeal for 18-34s.

NELSON: Now you just mentioned sort of avoiding the power of 60 Minutes which has always been a powerhouse on the schedule. When you're doing that scheduling, how much are you concerned about what the broadcast networks are doing, what other cable guys are doing, or are you just saying we're HBO, it's not TV and we're going to do what we're going to do?

BALDWIN: It's about 50/50. We're aware of what's there, but we also know that anytime I premiere a show in a time period, depending on the series or the movie, that's really no more than 20% of its overall viewership and so I'm not going to get really excited because we're not selling airtime, we're not in the ratings battle even though most of the media writers still think we're in a ratings battle. It's not about time period ratings or premiere ratings; it's about how you close the show. In a parallel universe, theatricals, they like to open big but they sure do like to ring the bell six weeks down the line where they stay big and they end up with 100 million dollar picture. For HBO, we know which ones have the potential of starting big, but we also know which ones you need to help along with on-demand offerings and the fact that Nielsen now can measure DVR playback, and we tally all those now and start staying, "No, our goal is total audience," which interestingly was where I walked in the door in 1978. Before technology ever started we did research with an 8 ½ by 14 document that was folded over and it was all of the lists of all the programs on the first page that we aired, and we sent this out to consumers and asked, "What do you watch?" Check. "How much did you like it? Excellent, good, fair, poor?" Check. And so all we were caring about was the cume from day one. We didn't ask them "When did you watch it?" Just "Did you see it and what did you think of it?" We did that for originals, the documentaries, the sports and everything and invented a formula. This was, again, going back to Les Dorney, who I mentioned three hours ago, who was a researcher that came down and kind of brought marketing research, satisfied usage, as a concept into HBO because it was a product, it wasn't TV. And so we monitored TSS, Total Subscriber Satisfaction, very carefully by show, by the number of shows, all of that was part of our analysis before we got in bed with Nielsen and time period research. So in a sense, 30 years later after I walked in the door to a company that cared about total audience and satisfaction, through all of the journey we're back to a company that cares about total audience and satisfaction.

NELSON: You haven't gotten very far, have you?

BALDWIN: No! I feel like I'm coming around past the grandstand, waving, "All right, are we ready for another lap?"

NELSON: One of the things that these days figures into total audience is the on-demand side. Now how does that play into your scheduling strategy?

BALDWIN: Now that we've gotten fairly good distribution, and it took awhile for cable to grow its digital base to get us there, but we're now in, I think we're in around 13 million cable homes that have HBO On-Demand. This is out of our total 18 million or so cable base, and the rest of our subscribers are satellite, which can't enjoy the technology yet, and other units. But I mean, that's a pretty good percentage of homes that have HBO On-Demand available and because of that what we do now is on occasion we will premiere a series on On-Demand six days earlier before we get to our linear premiere on HBO on Sunday night. Two reasons: one, because it's going back to the nature of HBO is a special product, we don't sell advertising so we don't care about that number whatever it is, and it's fun to watch something that no one else gets yet or that you can watch on your own time. So we do a lot of that and we're going to do The Wire upcoming in January that way again this season except we talked to David Simon and since this is the last season and the finale we all decided, you know, let's not put the finale on there, on On-Demand, let's let everybody show up on time or watch it later. But it is a big part of our usage, it adds a significant amount of usage to every show, every movie, and it also enables us to use rights that we don't have for linear anymore. Back when we got into the business of being a media company and sold Sopranos rights and Sex and the City rights to basic cable, we held back On-Demand and broadband digital. We sold them linear only. So one of the things that HBO On-Demand does for us is give today's subscribers an opportunity to view the classics and the evergreens, because we always have a number of episodes up there of these great series as well as the complete inventory of things that are on the air now. So it's really a morphed product; it's not just like HBO linear at all. It's separately programmed, my folks spend an awful lot of time thinking through what's the right menu selections, what's the right category, sub-categories for the click downs, all that stuff. But it's been a terrific experience because at the outset, when this was being discussed in the late '90s when it didn't exist yet, the joke was, "When we get On-Demand, Dave you're out of business! Nobody's going to need a scheduler anymore." Not so fast, my friend. They will need someone that decides the menus and the selections and how deep, and also another game that we play is that the cable operators still give every provider a certain number of hours on server and it's like favored nations, everyone kind of gets the same number of hours so we're restricted. We can't put our entire inventory up there that we have in a month so we have to be selective about what those menus look like.

NELSON: Those are sort of like playing under the salary cap in terms of you have so much to work with so you have to maximize the value of it.

BALDWIN: Right, and HBO is a Steinbrenner team.

NELSON: (LAUGHTER) Nice position.

BALDWIN: Yeah, we've got the All-Stars. We'll let them figure out what they're going to do over at Showtime and Starz, but it's a darn good product. It has high satisfaction among the users. Our issue right now is still getting people that are not tech savvy to understand that it's different than VOD, that when you go to HBO On-Demand there's no charge, there's no specific charge, it's a buffet. Eat as much as you want, we don't care. You've paid for it in your linear subscription, this is value-added for you, and as a consequence what you see in the demography of On-Demand differing from linear is that it's a younger base, and knowing that you really can think about, all right, if it's a younger base I'm really going to hit it with Flight of the Conchords, shows that the younger demos want, maybe leave them there a little bit longer. But then you're always trying to entice the older demography to come in and try it.

NELSON: So you're still, you personally, are still in business because how you use this and what you put on there, given the limited capacity you have to play with, is still a significant thing, and I want to ask you one more thing about that because some of your shows, even though your concern is cumulative viewing there is still a sense of appointment-like, you're just going to be there in front of that TV set at 8:59 on Sunday. Now when you release this stuff on On-Demand is there any way that you can see that in fact – because at some point it goes on the server, so there's a point in time – is there any way that people are primed for that, waiting for that, jump on it, or is that just much more of a level consumption?

BALDWIN: Depends on the show, depends on whether it has an established audience.

NELSON: Well, take a big show and established audience, are you saying that...

BALDWIN: So let's take Big Love, for example. Big Love is a show that we don't premiere on On-Demand because we're still trying to develop that notion of it's Sunday, it's 9:00, it's Big Love, in-season. When it gets a certain amount of legs to it maybe we will but it's always a show by show thing. I like having some shows that maintain this signpost anchoring, and then other shows that probably have less overall big show impact on a premiere but have overall growth potential because they're not the kind of things where you need to get in right away, or in the case of The Wire, for example, sometimes because David Simon's dialogue is so accurate and authentic street dialogue that our viewers go back and watch it again. That was the case with Deadwood. David Milch, I mean his dialogue, it was Shakespearian Western.

NELSON: Right, nobody ever heard that before. With a lot of swear words in between, right?

BALDWIN: Some of the soliloquies were just magnificent but your head would spin, where did that come from? And people would go back either on DVR or On-Demand and watch it again and say, oh, that's what it was.

NELSON: So actually that really does enhance the consumer value and satisfaction because they get this opportunity to go check, even something they've seen already they like to go check it out again.

BALDWIN: We said early on, a DVR or HBO On-Demand are actually superchargers for an HBO subscription because we're agnostic, where they watch it, how they watch it, how many times they watch it. We're very serious about the fact that they pay us for the product and anything that allows them to feel good about the value for cost is the business we want to be in. So if we buy great movies, we make great movies, we do series, sports, whatever, as they did back in the '70s when they said we're going to rotate these around, if they paid for it they have an opportunity. We now have even greater opportunities to get to the consumer or to have the consumer get to us, particularly in a world where you've got 200 basics, a lot of television out there. You still have to have a home that has a distinct feel, that has a brand image, and has a tonality of the kind that's carried HBO all these years.

NELSON: Now in terms of you just talked about more places that people can see things, we're moving into an era here where again we're seeing shifts due to the technology where at one point on-demand seems so new, now it's really part of the landscape. Now we're looking at programming moving onto other much more, let's say, unconventional platforms in terms of because they've got small screens and things like that, how are you looking at that as a way to extend your programming, or are you not?

BALDWIN: Good question.

NELSON: Because everyone is kind of buffaloed by this, aren't they?

BALDWIN: Not buffaloed, I'm pondering how much I give away now versus how much is tactical. We acknowledge the shift. One of the things that concerns us a great deal is digital rights management because one of the shifts is place shifting. It's not so much time shifting anymore; in the home and on the television that pretty much is yesterday's game. We figured out that game. Today's game is place shifting to a laptop, to a remote player via Slingbox and other technologies where you can be somewhere else and move the stuff maybe into areas where we're not even licensed to exhibit it. So the rights management of most of the new technology is of primary concern to us, making sure our product's secured. We're not selling advertising so we're in a different game than broadcasters who are now throwing everything against the wall and seeing if it sticks. They have played every experiment they can possibly play and they're still playing more about how to get their shows to the public – imbed the advertising, don't imbed the advertising, charge a buck 99 on iTunes – every model they can go through is to their benefit because their end game is selling ads and amassing the maximum number of eyeballs as a following enables them to fill the mission of their business statement. For us, letting more people into the tent to watch it who are not paying for it is against our primary business. So we have got to be more introspective, more cautious. For two years people were saying I can't believe you and Apple can't do a deal. Two great companies, two great brands, you've got terrific shows – why aren't you guys on iTunes? Everybody else is! For us that's not a good business right now because we still have home video, we still sell DVDs and if you look at a buck 99 per episode, with their business model the only way they do business is if you premiere it the day after or make it available the day after, and for us I've only done 20% of my business on that episode and now I'm out there selling it to everybody? I've still got 80% of my audience I need to find in the next two or three weeks.

NELSON: So you'd be undercutting yourself.

BALDWIN: I'm undercutting myself two ways, audience potential and then to the extent that we sell DVDs that pricing is much higher than a buck 99 an episode. So that doesn't work for us quite. In other areas of the digital initiatives, we're a long-form company. Movies are long-form, our originals have been long form, 30s and 60s. What seems to be happening on the internet right now with MySpace, YouTube, on and on and on, is that the vernacular is short-form, 3-6 minutes pieces.

NELSON: And free.

BALDWIN: And free, with maybe an ad left or right, whatever. But that's not our vernacular. We don't have programmers, writers, people that are focusing on the short-form as an entertainment experience. I'm sure that the next time that you and I sit down when I've been here in the business 60 years we'll probably be there, but somewhere along the line, I think, it's fair to say that all of us in entertainment have to look at short-form programming as the next wave – how we make it, how we make it distinctive, how we make it worth paying for are the keys to our success, not just in reach.

NELSON: Now just to wrap up here, if you're looking back on your career which obviously is still going forward...

BALDWIN: I hope so because I've got a hell of a mortgage!

NELSON: What do you look at or what would you point to as your legacy – I hate to use that word, it sounds like we're getting ready to put you six feet under – or what you would consider your greatest accomplishment? What have you contributed to this business?

BALDWIN: Ah, God, now it's time to pat myself on the back, is that it?

NELSON: Yes, we had to get to that. Generally.

BALDWIN: It's not me, it's all my people.

NELSON: But I mean as a collective.

BALDWIN: I think when I do pack it in and leave, the primary legacy I will leave behind at HBO is something that was taught to me in my first few months when I got there. I had the advantage of having two or three first-class mentors and because they were from Time, Inc., because they were from the gray flannel suit era of Time, Inc. and they were old school, but because we are collectively in that building, that corporation, still pretty old school in terms of how we manage and how we run our businesses, most of the lessons learned were how to conduct yourself in the company. Learn from the old, teach to the young. Your mission is to figure it out, and then try to impart that wisdom to the folks that work for you so that they can be better and smarter and do more things than you could because they have a couple more years that they're going to learn. Second, is big principle, the group generally out-performs the individual. You have a lot of folks coming into business today that are coming out hot from grad school, want the corner office, they want to accelerate rapidly, and this is no different than it was 30 years ago, but they haven't learned to play on a team yet and when you can impart that to your team to say, look, there are no knives going into anybody's back here. It's not tennis singles, this is football, and even the women understand. It's a team effort, you do one thing, you do another thing, you do another thing, collectively we're going to advance what it is that we do a lot faster than if you try to stand up and be a solo act and claim your brilliance and your ideas and then disavow anybody else's. So those lessons of how you pull together and motivate a team... I will say, I mentioned Les Dorney before, I had another really good mentor who was the controller at the time and his name was Bob Becker. His unofficial title was the out of controller. He's a drinking man, was at the time, and some of the biggest lessons I learned about business, about the company, and about how to manage people were at 1:00 or 2:00 in the morning, standing at a bar and just listening to the wisdom of someone that was ten years older, had been in the company for awhile and had experienced how you succeed. The other one, Les Dorney who came down, the biggest thing he taught me was you know, you don't have to paper the company with memos and tell them how smart you are and have it four pages deep. One a month maximum, maybe one every two months, shortlist, people that really are interested and put it on one page because they don't have time to read your bullshit.

NELSON: So after all this, Dave, I guess that you're still the school teacher at heart in terms of how you approach the business and how you approach your people.

BALDWIN: Pretty much, because you have to at least believe that they want to excel. You have to believe that they want to succeed and what I do is just take away the barriers, put the tools in their hands, and put the spotlight of attention on them. If they do something great, fine. But that instills over the years. I can sit in my office and if anything goes wrong, and we have to operate in our business scheduling and then the law of operations which we have to be accurate within a few seconds everyday. There is no error on the broadcast logs, otherwise things screw up. So you operate at that high level of accuracy, someone is going to be human, someone's going to screw up, but what you instill in them is take ownership and come in, "I screwed up," or "I wanted you to hear this first: this happened, I'm taking steps to fixing it and hopefully this won't happen again," or it's just pure human error. That's the kind of spirit you get if you pay attention and manage and it makes life easy. One of the things I did when I got out of teaching is I said I'm never going to wake up in the morning and lie in bed thinking is there a grandmother that hasn't died yet, is there an illness that I haven't had yet, is there any excuse I can use to call in sick? And it was that bad towards the end. So now, basic rule of thumb, is that basic principle, if you wake up in the morning and it's just getting out of bed and saying, "Jeez, I've got this to do today," and you're going through your routines and you never once think that you're not going to work or don't want to, stay in that job.

NELSON: Well, I've really enjoyed this seminar and learned a lot from you. Thanks very much.

BALDWIN: My pleasure, Steve. Good luck with the project.

NELSON: And good luck to you.

NELSON: Hello, I'm Steve Nelson for the Oral and Video History Program of The Cable Center. Today is December 6th, 2007 and my guest is Dave Baldwin, Executive Vice-President of Program Planning for HBO. Dave, you describe yourself as a poor boy from Pennsylvania. Tell us about growing up.

BALDWIN: Well, I'm a poor boy from Pennsylvania trying to get by in the big city. I grew up actually in a very small town. We had three gas stations, three bars and one grocery store, but it was an idyllic childhood. It was one of those Saturday Evening Post kind of realities where you could go anywhere, do anything, as long as your home for supper. It was safe, we would roam the hills, we'd be out on our bicycles, pick-up baseball games – it was really a wonderful way to grow up.

NELSON: And what time period is this?

BALDWIN: This was... I'm a child of the '50s.

NELSON: Okay, okay, as am I. But what about TV at that time? You had three bars but what did you have for TV? I bet you didn't even have three channels!

BALDWIN: We had color bars, actually. We had one station that we could get clearly that was the VHF station out of Binghamton, NY just up over the state line, and it was one of those creatures that came about during the '40s and '50s, it was a tri-affiliate so we would cherry pick shows from CBS, NBC and ABC. Whatever they felt like programming is what they put on.

NELSON: Was this the best of, or maybe the not so best of?

BALDWIN: It was I guess whatever they thought they could sell and get the most money for their airtime. It was just the way I grew up and as I met friends in the '60s in college that had come from other communities they were talking about shows that I'd never even been aware of because they weren't offered. I thought we had everything, you know? But, interestingly, in the early '60s at the beginning of cable television, our community, because it was so isolated by the hills, it was down in a valley, we were actually serviced by cable pretty early. A guy, typical story, ran a TV shop in town and to sell more TVs he went up to the top of the tallest mountain around town, put up an antenna, strung wire all the way back into town and went door to door selling cable and therefore more televisions. So I was introduced to cable real early.

NELSON: And this was before you went off to college?

BALDWIN: This is actually... no. My parents didn't want to get it, they were perfectly happy. My father had spent a lot of time erecting this massive, like 50-foot antenna on top of the house.

NELSON: To get one channel.

BALDWIN: To get one channel, and it had guy wires attached to all four corners so it would be stable in the wind, and then the next step was of course he had a UHF antenna that he put onto the mast so now he could get the stations out of Scranton/Wilkes-Barre which was south of us but over a lot of hills. So he was all set up. Free is free, and he liked the way that he was getting it free and he saw no reason to pay this guy $4.95 a month to get the same stations which is essentially all that he was offering, just the same stations.

NELSON: Do you recall who this guy was or where he wound up being? Because there were so many guys that started in the hills and valley of places like Pennsylvania and went on to fame and fortune.

BALDWIN: I think he started and ended there. I think as a lot of these moms-and pops grew up he did what a lot of them did and sold out to the next biggest guy. I think right now they're serviced by Blue Ridge Communications.

NELSON: Okay, So you went to college, which was where?

BALDWIN: Penn State.

NELSON: At Penn State, okay, and people are talking about TV shows you'd never heard of – do you remember what any of them were?

BALDWIN: No, just that I was missing part of my backgrounds and history, I was missing part of popular culture, but fortunately it was the '60s and we were reinventing popular culture anyway, so it mattered less.

NELSON: And what were you doing in college? What was your area of study?

BALDWIN: In college... I actually went to college in my freshman.... I changed quite a few things along the way. I went to college thinking that I would become a chemist. I had a great chemistry teacher in high school and I did great on my chem boards, and I actually, whatever that word is, I jumped over the initial chemistry and went right into the second class. At the end of my freshman year when I found out that chemistry was really math in disguise and I was not that good in math, I decided, you know what? There's a war going on. I was not really keen on the idea of joining this war because I was brought up Methodist, I believe in thou shalt not kill, and actually all the teachings of the church, and I was shocked when the church started backing the war and it was like let me see if I can get these two ideas and get them together here. I said if I had to pick one which one do I do. I said let's go back to the original text here, thou shalt not kill and war is bad, so I parted ways there and so I needed a way to get out of going to Vietnam because there was a draft.

NELSON: I remember it well.

BALDWIN: At the time one of the professions you could choose, and I think it was morally right, if you were to be a school teacher then you were exempt from the draft. So the rest of my time at Penn State I spent as an elementary education major and looking forward to going out into the world and becoming a teacher, and then senior year 1970, '69-'70, we had the first of the draft lotteries. That was an interesting experience.

NELSON: Did you get a high number or a low number?

BALDWIN: I had a low number and let's just leave it there. I had a low number and I did not go to war.

NELSON: Okay, well, we're not going to probe into that. So what did you do, though?

BALDWIN: I actually came to New York. I had met a wonderful woman working together at a summer camp in Pennsylvania. She was from Brooklyn, there were certainly jobs in the New York City public schools, I applied. I started out teaching 3rd grade at PS 150 on Sackman Street in Brownsville-Ocean Hill, Brooklyn.

NELSON: So you've gone from small town in Pennsylvania, State College which is out there, as you know...

BALDWIN: Happy Valley!

NELSON: And now all of the sudden you're in Brooklyn?

BALDWIN: Um-hmm.

NELSON: This is culture shock, no?

BALDWIN: This is big time culture shock, but you know, a welcomed change because as you remember, Steve, the '60s were all about change. Everything was evolving or there was a revolution around every corner. 1969 is a year just taken in general. Every week, every month, something happened in 1969 that was the first of its kind. There's a man on the moon, people are being assassinated, everything was changing. So for me it was just like this is life.

NELSON: Go with the flow, right? As we used to say.

BALDWIN: Dive in, learn some new things, get yourself involved with other cultures. I had a diverse class of 65% black kids and 35% Hispanic, and then this white kid who grew up in the hills of Pennsylvania, this was quite a learning experience, let me tell you. It was a challenge but it was something that you felt good about because you were giving something back. But I won't kid you, it was not the easiest job I've ever had.

NELSON: Yeah, I wouldn't think so. Where were you living at the time?

BALDWIN: I lived in Brooklyn, a great old neighborhood called Park Slope that had just started to be gentrified and rows and rows of fabulous turn-of-the-century townhouses.

NELSON: You could actually get into Park Slope then, right?

BALDWIN: You could very easily get into Park Slope. Two doors up from where I found my first one-bedroom apartment was a project that Brooklyn Union Gas had actually done, renovating a brownstone to tell people, "Look, this is great housing stock here. If you just put a little bit of money into it, and we'll help you, we can revive an entire neighborhood," because it was left kind of fallow during the white flight of the '50s when everything was going on east of here on Long Island. All of the families, because "Oh my God, there's a black family that moved onto the block," were running out of the city.

NELSON: "We're out of here," right?

BALDWIN: And we're out of here. And then there was the banks doing redlining for financing. It was a pretty nasty period and so in the end, in the '60s, you ended up with really terrific housing that people needed, and then over the next two or three decades it's now to the point where I can't afford to live there.

NELSON: For people who don't know Park Slope, it's one of the most desirable places in Brooklyn, or in New York for that matter.

BALDWIN: It's well served by a subway into Manhattan, an island apart.

NELSON: Okay, so now you're a teacher. How long did that go on?

BALDWIN: It went on for seven years during which time I went to Queens College, got a Master's Degree in Library Science, specialty in Children's Literature, which was a lot of fun, and I became a school librarian first at a school down the street from where I was, took over that library program, and it was the era – I don't know if people will remember the Johnson years, but there were ESEA Title Grants that would go out to a lo of the schools in the nation. It was a time when the federal government really did support education. It wasn't just lip service; there were bucks. And we had in our district enough money if we pooled our resources to really develop first-class libraries in the elementary schools, and one of the things that we did was go out and buy as many films from Zagreb Studio, from the Canadian Film Board. These were very exciting new kinds of films that had no dialogue. They were telling stories just with pictures or with animation, and for kids that were really far behind in their reading skills, this was a great avenue into it because they did watch TV and they could form stories and they could tell stories. Here you get them in and then you have them watch an eight minute, ten minute film and tell you the story and write it down, and then give it back to them and said, "You just told me this. Let's see if we can read that now. Read your story. I'll help you." Listening centers – it was a time when reel to reel audio tape was transitioning into cassette tape and it was relatively inexpensive. What we would do is put together listening centers with a tape, eight of the same books around the table, and you'd start the tape and they would follow along. They would see the words, hear the words, and be guided. I had an assistant making sure that everyone's still on track, and it was fabulous. I was having the best experience in just three years of my teaching career running a library.

NELSON: So is this kind of broadening your view from the library guy, which is typically a very print thing, now you've got this whole audio-visual component going on, I'm suspecting here that this somehow led you in a new direction, so tell us how that came about.

BALDWIN: The tangents started at Queens College, actually. I had a great professor who was involved with a project called Art Doc. We were here in the greatest city in the world for art. Soho had just exploded and the big galleries downtown had room to show some of the most exciting art and so they were here. At the same time, Sony had developed its first black-and-white reel to reel portable video recorder. This is 1971-72.

NELSON: I remember it well because that's where I got started.

BALDWIN: There you have it. So as part of my education for being a librarian I signed up for this, it was a volunteer course, it took place Saturdays, we would meet at – I can't remember the luncheonette. I mean, Soho now has completely changed; it's all fashion and haute couture and stores mixed in with the galleries. Back then there was, I think it was called the Whistle Stop, where all the tradesmen, all of the workers that were still there – there were a few factories still left but most of them had gone – have coffee, go over to one of the galleries, either Meizel or somebody else, set up and have the artist come in – this was before opening hours – talk about his work, we'd capture it on video and then we'd go back to Queens and mix the audio and the video, dub it, and send it out to maybe 120 schools nationwide that had art programs, wanted to hear and see what's going on, but couldn't afford to send their students to New York City.

NELSON: So were these like half-hour programs or 10 minute...?

BALDWIN: Ran a half-hour to an hour, depending on how loquacious the artist would be, and some are very and some are not.

NELSON: Right, not very verbal.

BALDWIN: Yeah, sometimes their expression is on the canvas, but it really got me into... those experiences from librarianship, interestingly, and some of the books we were reading at the time about the transition of information technology, because librarians saw the future coming in terms of how information would be stored, how information would be shared, because it's their business, has been for a long time, and they saw the technological revolution that was coming with getting away from movable type, certainly, into computer generated text that could be easily printed and cheaply printed, and then even beyond that where you didn't even need a book, which is where we are today.

NELSON: So you picked up some of these production skills or were you working with somebody that did that?

BALDWIN: Rudimentary. I'm still not good...

NELSON: Well, at that time, all that was very rudimentary, especially working with the little reel to reel tapes and that Portapack.

BALDWIN: Uh-huh, and we had two decks and trying to get a clean cut on play and record and the switching, and it was like patience, patience, I think.

NELSON: Not exactly like the editing process today.

BALDWIN: Not an exact science.

NELSON: But did this kind of whet your appetite in any way for this whole experience for getting into something else? I'm still trying to find out how you made this leap.

BALDWIN: Ah, the dramatic moment?

NELSON: Yeah, the moment, right, right.

BALDWIN: The dramatic moment was in 1976, in the fall of '76. ESEA funding from Washington had pretty much dried up. The New York City public schools were going through an enormous change because of that, and the body of teachers they could afford was shrinking, and every year for '71, '72, '73, every year you'd come back and unless you were there in the system for eight, ten years there was always a question whether you had enough seniority to continue to be employed by the school. I had passed under the limbo stick two or three years in a row, but this particular year came back and "Sorry, we have to let you go."

NELSON: This was after how many years?

BALDWIN: This was after setting up, three years of this wonderful library program, getting to know every child in the school, where their buttons were, and just finally saying, all right, I've gotten up to the top of the hill and let's enjoy the view here for awhile. The idea that I wouldn't be able to stay there hurt, but then they said, "But we have good news. There is a library position open to you over in Bed-Stuy." "All right, fine. It's a do-over." I go over there and meet the principal and see the library, and it was everything that I had just set up. It was fabulous. However, to make room for me, they had to let go their favorite librarian who the kids loved, and another young person like myself. We were all in our mid-20s.

NELSON: Yeah, yeah, the budgetary triage here.

BALDWIN: Triage, and you know what? It was just an untenable situation. As hard as I tried, month after month, getting involved with the teachers, getting involved with the students, it was like "God, I just got over three or four years of work and now I've got to go into it one more time." And then one morning in April I kind of woke up, drove to work, got to school, looked around and said, "You know what? I cannot do this any more. There's got to be a better life. I don't want to be miserable, I want to do something that is rewarding and makes me happy."

NELSON: And also where you don't come in and they say well, thanks for the great job but no thanks.

BALDWIN: So I basically went down to the front desk and said, "I'm going home."

NELSON: You just walked in and said I'm outta here?

BALDWIN: "Will you be back?" "Eh, probably not." "This week?" "No, pretty much I'm outta here."

NELSON: So this really is this incredible turning point.

BALDWIN: This was the turning point that I think people who are unhappy in their job either get to or they don't, and fortunately I got to that and said, "You know what? I've put an investment in education, I've put an investment in this, but it's not payback. I need more out of life." So I just jumped and for the summer went out and had a blast, played tennis, bicycled through Brooklyn down to Coney Island, it was just fabulous fun and then my wife at the time reminded me, you know, you do need to get a job.

NELSON: Oh, that.

BALDWIN: So then I started the typical process of networking and meeting people and at that point exploring what am I going to do, where am I going to go? I know nothing! I'm a teacher! They're in short demand now.

NELSON: And you're looking for something else anyway, really.

BALDWIN: Yeah, but I started out looking for library positions because that's where it was and I went down to a private school outside of Philadelphia, told them my background – "Well, what have you done?" "Well, I've worked in some pretty tough neighborhoods in Brooklyn," and this is an old world, all boys, and I think all Protestant white boy, school. They didn't quite know what to make of me because I still had my '60s hippie hair and my wide watch band. I was of the moment. And so after a couple more interviews with library positions I started looking at what else is there in the world. My ex-wife and another woman were teaching at a private school here in New York together and she said, "You know, Dave's looking for work," and the other woman said, "Well, you know, my husband, he's in TV. Boy, he loves it. He really loves it." "Really? Would he be willing to talk to Dave?" "Sure, just call him up and come into the office. What could it hurt?" So I did. I called him and the fellow's name was Lee Deboer, who sooner or later you'll get his oral history, he was there early. He was working at a rep firm called TeleRep which was run by another pioneer, Al Masini, who basically changed the whole landscape of syndication television and how time sales was done. This was a first class outfit. They handled all A-list stations nationwide and they were just a Storm Trooper mentality.

NELSON: So why would they look at you? This was a real high-end...

BALDWIN: Well, because Lee was running one of the research groups and just because he was asked I sat with him, talked to him about stuff, and I said, "You know, where do you start out here in this field? I'm not trained." So he introduced me, or gave me the names of four or five research directors in the business and I called them up and arranged for an interview, and at one they had an open position and I remember the dialogue. I said, "I'm really not trained or qualified," and he said, "Well, don't worry about that. Nobody is. They come out of college, they don't know what they're doing. We train them on the job." I said, "Well, look at it this way – I know Library of Congress, I know Dewey Decimal. What have you got? Nielsen? It's all numbers; I'll figure it out." So I was coming into the field, actually, I was 28 years old at the time, I was older than the typical introductory research analyst at a rep house. They usually come right out of undergraduate and go right to work crunching numbers because it's all on paper, you looked at Nielsen books, eye strain was a big problem. You would run endless amounts of numbers to do estimates for your sales people who would then go out and make calls on Madison Avenue to sell the airtime. It was a great game, got involved totally in reading all about television because it was foreign. The business of television, I never thought behind it.

NELSON: What did you know? You hardly even watched television in your earlier days!

BALDWIN: Exactly, exactly. Someone... I'm trying to remember the author – a very influential book someone just passed along to me, it's called The Business Behind the Box, which is I think great reading for anyone that's going into commercial television. This is going back to the basics of how do we make our money, and so I kind of understood it from there, started reading the trades, it was kind of like taking my own college education...

NELSON: And you knew how to do that.

BALDWIN: Ingesting information, and a year and a half later I'd been promoted, I was a manager and I had staff working for me.

NELSON: What was the name of this place you were working at?

BALDWIN: This was a place called HR Television which now is...

NELSON: Get that on the record.

BALDWIN: Yes, on the record. Wonderful, innovative people. Now the company's called SelTel, clever, S-E-L-T-E-L, get it? Sell Tel? So their big thrust when they purchased HR was that they were going to computerize the business, take it away from paper and change everything. Transition avail sheets and transition posting – all of that stuff, and they made a really good run at it. Unfortunately they were a long list rep; they didn't really have the power in the industry to have people follow them. They had to wait until everyone else, CATS and the rest of the folks, kind of grew up around the concept. But it was a great place to start. You certainly learned how to be creative with numbers, put together a pretty good... and back then we did one-sheeters to give to the salesmen and they were clever little things that you'd want to focus on, either a demo victory or an increase in the time period and then you'd put a little graphic on it and give it to the salesmen so they could drop it off.

NELSON: Something to latch on to other than numbers.

BALDWIN: Yeah, something to latch on to the primary concept. That was the creative side of the job, but otherwise it was crunching numbers.

NELSON: I'm getting the impression that the crunching numbers probably over the long run maybe that didn't sit that well with you.

BALDWIN: It was okay but I didn't want to live my life doing this on a calculator. So a year and a half later, it was summer, late summer/early fall, mid-fall of 1978 – this same fellow, Lee Deboer, had moved from TeleRep, had been hired by Home Box Office to start their real research efforts because up until '77 they basically had no research effort to speak of. They had a fellow by the name of Les Dorney who had come down from Time, Inc. He used to be the research director of Life Magazine, and of course Life was in a downward spiral at that time, they had to let a lot of people go, but Les was a lifer that was sent down, as many, by the way, of the executives that started HBO were actually sent down from Time, Inc. to keep its eye on this new business that these kids are starting up, "We don't know much about it."

NELSON: Time, Inc. didn't really know what to do with, perhaps.

BALDWIN: Exactly, but they did have some executives, both young and seasoned executives that they would send down and populate the executive ranks of HBO at the time. So Lee was given a budget because they were looking forward to 1978 where it was projected we would turn our first dollar profit. This is a business that started in '72 and was running six years under water, and it's amazing to think about that sort of business startup today, something that had that much capital investment to go that long without making a dollar for your parent corporation. Doesn't happen that often.

NELSON: That would be shut down quickly.

BALDWIN: That would be shut down, I don't know if it would make it past year three. But there was money and so Lee went out and hired a few folks and the research group was formed at HBO. One of those jobs was mine because I came over and essentially I had to meet two or three layers of management, it seemed to be a good fit, and all that I'd been reading about in the trades since I started working in television for 18 months was how fast cable was growing, how fast satellite-delivered television was growing, and that the king of the hill, of course, was Home Box Office. It was the hottest, fastest brand in America in terms of growth and was something that a lot of people really wanted.

NELSON: So this was from your standpoint what a great place to land.

BALDWIN: This is my dream! No more ads...

NELSON: Get rid of that part of it, right?

BALDWIN: No more fabrication of lies, damn lies, and statistics. What a unique experience! I had 25 stations at HR, here's one station I can know everything about, and oh, by the way, management is only interested in finding out the truth.

NELSON: This is shocking!

BALDWIN: What are they watching, what do they think of the product? Just figure it out, tell us where to go, what to do. You are the eyes of the corporation and the ears. Get the information and we will change it in whatever direction you say. How can you turn down a job like that where you've gone from being the low man on the totem pole to now you're right up there with the executives in the top echelon having dialogue about what's going on.

NELSON: So they really were driven by trying to really understand what their viewer or what the consumer wanted as opposed to fudging that a little bit because you're trying to push advertising.

BALDWIN: From the outset because it didn't sell advertising. It was driven by the consumer dollar. The whole goal was to try to figure out how to make it stick. Once you're in the home how to keep them subscribing, what was it about the experience that they liked, and from the outset we didn't show things just once a week. The paradigm turned on its head. Commercial television that we all grew up with up until that point, the Sullivan Show was on Sunday night and you'd wait until that night; Twilight Zone was on Friday night, you'd wait until that night for that show, and you'd watch it through the season and then the summer rerun season would come back. They'd show the 26 back episodes all over again and then you'd start the new season. But HBO because of the nature of the programming, you've paid your money, if I just showed Saturday Night Fever one time on Sunday night at 8:00 and not again until six, nine months later, well, that would be a pretty... remember, VCRs didn't exist when we started. There was no way to capture it. So our paradigm was no, they've paid for product, give them opportunity to use it.

NELSON: This is a kind of rudimentary time-shifting in a sense. You can find it at other points in the day and the week.

BALDWIN: Exactly right. So we would set up one of the initial pieces of research, once we got set up with diaries and we worked with Nielsen and we started keeping real time period information, was how do you optimize a flight – this is kind of like ad grad school level – how do you optimize a flight of a show, not a 30-second spot, to reach as many demos and increase the cume audience as high as you can without getting to a point where the majority of audiences are now looking at it as an annoying repeat. What are the nights, what are the times, what are the demos you're going for, and it was great fun to figure that stuff out.

NELSON: But nobody had really programmed that way before so you had no models...

BALDWIN: No, didn't have to, didn't have to!

NELSON: So you have no models of looking and saying this is how you do it, you run them x number of times, and you do a Monday and a Thursday and a Sunday night and whatever. So you were really inventing this whole process of repeats.

BALDWIN: Well, certainly the folks before me were the inventors.

NELSON: That was underway when you got there.

BALDWIN: It was underway. Ours was to tweak it. They only had a limited amount of inventory and they had to fill up a lot of time, which is another interesting thing, when I joined the company in 1978 we would sign on in the afternoon at 5:30 or 6:00 and sign off at 1:00 in the morning.

NELSON: That was it.

BALDWIN: There were very few 24-hour stations. If you think back to the '70s, most broadcast television said goodnight after the late movie and came back on in the morning. So we felt no urgency to get there until... capitalism and competition are always good. There was a channel called the Star Channel and from its inception over at Warner AMEX they were a 24-hour movie service which put pressure on us. They ended up actually owned by the folks that owned Showtime, and that was their wedge into the pay industry because HBO had the lion's share and Showtime and The Movie Channel wanted to come in and see if they could grab some of that business share away from us and one was we're a full-time 24-hour service.

NELSON: And was that available on cable, Star?

BALDWIN: Yeah. But that morphed into The Movie Channel rather early.

NELSON: You talked about working with senior management when you got to HBO. Who was the senior management at the time? Tell us about some of the people and personalities.

BALDWIN: Oh, wow! Jerry Levin, who we all know the history at this point, Jerry Levin was Chairman, CEO of HBO at the time. His head of programming was a fellow by the name of Austin Furst, who was there at HBO during my tenure in research and then went off to form the company called Vestron which was one of the initial movers in the home video market. He was so successful at capturing rights for movies because he knew what the game was. Austin was a brilliant, brilliant man – still is – and went out and captured an awful lot of rights and sold an awful lot of cassettes at very expensive prices into that burgeoning market of home video in the early '80s, so much so that he actually produced a couple movies, the most famous of which was Dirty Dancing, but that was the end of his movie making career. He was a better businessman than a mogul. Working for Austin was Jay Walkingshaw. I think Jay was one of those bright folks that you found in Time, Inc. back then where they would go out and they would just sweep the college campuses and they'd hire the best and the brightest. So he was a very, very sharp businessman. And Lee Deboer, of course, the head of research was absolutely one of the best researchers I've ever met from then 'til now, just a steel trap mind, totally logical and he would go for the logical conclusion and if he didn't have enough information he'd know it and go back and find it. At that point, let's see, who did we have? Arnold Huberman, a name that probably is not mentioned too many times, was running our film acquisition department.

NELSON: And that must have been important because movies were such a big piece of HBO at the time.

BALDWIN: Were and still is a big foundation of premium television. But he transitioned out after two or three years after I was there, and I think '81, '82 we brought this executive in called Steve Shaffer who then solidified HBO's film buying with Michael Fuchs who had come in and taken over the programming department. Between Michael and Steve they kind of figured out that the real long-term future of the business was not in buying slate movies – which was when you'd go and here are the movies that they've released last year, we need all 15 and here's the price, and you'd do that over and over every year – but to go to a studio and say, "Look, I know you're going to make 15-18 films over the next five years. I'll take every one. Create the formula, you'll be covered, we'll be covered and we know that we'll have a movie inventory." Those were the two guys that kind of figured out long before the guys at the studios did because we were incremental to their business at the time. Their business at the time was still in theaters and their big dollars were coming from the broadcasters and there was no video window. So we just added a few dollars on top of the purse.

NELSON: But your window did get inserted in that?

BALDWIN: This is the genius of the fathers of HBO, I can't claim any credit for this, but our window came before broadcast window and before it got chopped up, all the naughty bits cut out and all of the commercial black inserted. So that was an advantage for us and they were happy to do that because at the time we were only 2, 3, 4 million subscribers which in contrast to the rest of the country wasn't going to hurt their broadcast sales too much. But once that pattern was set it was very difficult for them to back off of it. They actually tried to invent their own HBO. Four studios got together and said, "No, no, we didn't mean to do that. HBO is a middleman, too much power, too much leverage. You've now got 8 million, 9 million subscribers. We want to start our own service." And it was a very famous court case and we prevailed because basically the evidence showed that they were trying to exclude us, keep us from doing business and actually putting us out of business by starting up a business. They would feed their own movies to them early and then give it to us used.

NELSON: A little self-serving restrictive trade there.

BALDWIN: So they couldn't do premium television but they did come back in spades when the VCR was invented. They figured all right, this window I've got to put in front of HBO. So that was a beginning of the sequential distribution model that is now an enormous sequence of things and it's being played with back and forth. Even guys like Netflix now are into the mix for acquiring exclusive, first premiere rights off theatrical.

NELSON: You mentioned the VCR. Talk about that and what kind of impact that had at HBO when that started in the early '80s really proliferating in the marketplace.

BALDWIN: Well, it was a serious threat to our business obviously because it was pretty easy in those days to start a little mom-and-pop video store and people were getting into that business, 7-11s and the like. Instead of buying HBO, and at the time I think our prices were probably like $7.95, $8.95 a month, you could go in and rent a movie for $1.99 a night. Maybe you only want to watch two or three movies so the dollar economics in terms of the guy that only watches movies was like, well, why don't I just get a VCR and watch the movies I want before they get on HBO. So that really was a disadvantage that of course we turned into an advantage, which was all right, how do you beat that? Well, you buy more material and you present more material that they can't rent. So that's when Michael Fuchs basically said, "You know, we've got to make our own movies." He went out and formed HBO Pictures and we were making 6-8 movies a year with top talent. Remember Between Friends? We got Elizabeth Taylor in 1982 to make that.

NELSON: Now how did you... you probably weren't directly involved in that but that's such a seminal moment because HBO became so known for being able to attract all kinds of talent in front of the camera, behind the camera, that you just wouldn't think of as working for some TV network, and cheaper than...

BALDWIN: It was hard because the vernacular for actors and actresses at the time was that a television movie was a far lesser platform than a theatrical and many of them just didn't do TV movies because TV movies, traditionally, were disease of the week. They were designed for females 18-49. It was either disease of the week where someone in the family got sick and someone had to prevail and doctors and medicine and hugs and kisses and tears and roll credits.

NELSON: Very formula.

BALDWIN: Yeah, or they were woman in jeopardy which was the other formula. Somebody's a stalked or somebody's outside the window – whatever it was – and they were pretty much churn them out, grind them out movie of the week. In fact they were called MOWs, Movie of the week. Michael said "We're going to make them differently. We're going to fund it differently. We're not going to obviously put commercials in them and they can have real solid interesting stories." That started the run. We had already established ourselves with original programming with On Location, the standup series, and SRO, Standing Room Only, which was our music series, and throughout the period of '76 through '81 or '82, we were funding one a month of a comedian and a music show which was the underpinning, really, of HBO's entertainment original programming, which was exclusive, ours, couldn't see it anywhere else on HBO. And that meant a lot: for the people that liked movies but wanted more there was On Location and SRO, and then of course Inside the NFL which is now 31 years old was up and running back then in the football season, we had a baseball series called Race for the Pennant which did the same thing for baseball as Inside the NFL did for football. And then under Dave Meister and Seth Abraham we started the boxing program at HBO which was picking up again some rejects from commercial television. They were getting out of the boxing business so we jumped in and said, "You know what? Prize fighting is for us," and reinvented the coverage of the sport and became one of those other attributes that you could now, along with the movies and the comedy and the music and the sports, you could get live boxing on HBO, and reinvented the whole thing. Remember Gillette Presents on Friday night? It's a perfect sport! Three minutes of action, two 30-second commercials and back to the action, and that was how they made a lot of money. We didn't have commercials.

NELSON: So what do you do between rounds?

BALDWIN: We go in the corner, we get tight on the boxer, we get tight on the trainer, we listen to the dialogue, we listen to what the trainer is telling the boxer, and do some analysis and then do a little bit of highlight and then back to the ring.

NELSON: And so for the sports fan you're seeing something in a completely different way.

BALDWIN: That you'd never seen before. No one can have seats that close and can actually listen so that really put us on the map. During the '80s it was really one of those golden periods of boxing.

NELSON: Let me ask you, where are you at this point? Are you still doing your research, or you've moved up somehow or other in the organization?

BALDWIN: I spent 3 ½ years doing research, from when I got there in December of '78, and then a position that I knew I wanted after doing all this research on what people watch, when they watch it, how they watch, I wanted to not be the provider of information, I wanted to be the recipient and the decision-maker and the best job I could ever imagine since all the way back in repping was to be a scheduler because I could see the flow of audience and I could see how back in local television if you could stack your early fringe with the right programs that captured demos and flowed them, you're in the catbird seat. You can control two hours of television if you can put the right things there and get the right demos, and in HBO I figured, wow, what a great game because it's not so much audience flow but it's this great intricate puzzle of how to optimize the viewership, so I wanted that job desperately. Ruth Beltran, who had that job, made the decision that she would go back to business school and get her MBA, and I heard that and there were skid marks outside my office. I went to see Mack Perriman who was in charge of program scheduling operations at the time, and I basically said, "Mack, I want this job."

NELSON: And this wasn't even posted yet, I assume.

BALDWIN: No, it wasn't posted. He and I had worked together, and Ruth and I had worked together. But Mack was very old school about such things as hiring and interviewing and all that stuff. As close as we were, he put me through the formal interview, the luncheon interview, we even had a dinner interview.

NELSON: Like you'd never been around this place before.

BALDWIN: Do you know who I am? Do you know what I've been feeding you?

NELSON: Let me introduce myself, right?

BALDWIN: I said, "Mack, there is nobody on the planet that's more qualified for this. Come on! Hire me!" And he did, and I got the job running scheduling for HBO and Cinemax.

NELSON: Now I want to talk about scheduling because this is something a lot of people don't really know a lot about sometimes or focus on, and you've used an interesting metaphor so allow me to repeat it for you – you've used the word puzzle before and it is a puzzle, and people of course familiar with a crossword puzzle which has a series of white spaces where you fill things in and little black boxes that tell you, okay, one across is going to be five letters so think in those terms – you've used the metaphor of the diagramless crossword puzzle which some people may not know but you look at this puzzle, there's no black squares, it's all white so you don't know whether one across is three letters or six letters. So you're really starting with this blank slate and trying to create this complicated series of what goes where.

BALDWIN: I've used that analogy before because every month of programming, at least back then, was composed of different movies. You didn't have a lot of series back in the '80s or '90s, and even today we don't have a lot of series programming that takes a regular spot every week. So we're left with 24/7 across the primary channel and then six other plexes on HBO, eight channels of Cinemax, where you have a certain number of anchors. We anchor our movie on Saturday night. At least that's the two letter answer on a diagramless where you say okay, it's either "an" or "on". I've got a movie there, so that's what I'm going to start with and then you start filling out the rest of it. All right, if I start it there I'm going to put my movie through a time tested rotation, Saturday to Tuesday and then the following Sunday because I know that's the broadest sweep, research again, that I can possibly capture with demography. And then I'll fill it in a couple of other places depending on its MPAA, depending on its genre, whatever fits. The rest of it is unanchored and kind of the diagramless puzzle comes in again. Boxing, given that we know that they are boxing, where they're boxing and when they're boxing, which is often not firmed up until we've already published the schedules, unfortunately, and then we have to republish the schedules, but boxing is a Saturday night event for us. As it evolved, series generally are a Sunday night event, and those are the four or five anchor positions and then everything else has to be put in rotation across the main service and then decide how many other channels am I going to play this on and what time periods. I never played the game. That's the problem with the rap on Dave Baldwin. When I came into the scheduling department I was at a director level and the managers actually did the scheduling. I came from research, my job was to oversee and to prompt them into next levels of expertise. So interestingly, although I've run this thing for 25 years or more, I never scheduled a thing.

NELSON: So you're like the guy that manages the baseball team and never played baseball.

BALDWIN: Exactly right, but you know what? I went out for several days – because what we do with our schedulers is allow them to stay home with all the data, all the research so that they don't have to take calls, they don't have to engage in conversation, they don't have to do anything except focus on this puzzle and make sure it fits because you're trying to fit odd pieces. They're not all 30s and 60s and two hours. Movies these days either run 87 minutes or 2 hours and ten minutes or 2 hours and 18 minutes, and if you have a rather regular schedule for some of the stuff and if you have an irregular time period for the other stuff, sometimes you have to do the puzzle two or three times in order to make the pieces fit. So on their first day of scheduling they're allowed to stay home and focus on it, then they turn it back over to the rest of the team and then they massage it and the process is an iterative one. Back in the time when they were doing that, when I moved over in '81, there were no computers. They had huge pieces of paper, calendars and a couple of dozen No. 2 pencils.

NELSON: And a lot of erasers.

BALDWIN: Gum erasers, yeah. The little stubby eraser was not going to do it, so they had gum erasers and literally a shopping bag full of information on how new movies had played before and they went about doing the puzzle on a calendar with show after show after show. I knew enough to say, you know what, I don't type and I don't want to do that, but I'll manage the process.

NELSON: So you say, that's a good job, or we'll approve that, okay, that's July, we'll take it!

BALDWIN: But more importantly what it taught me right away, and I learned some of this from teaching, from research, and now going into scheduling, motivating and managing are really what you get paid for. If you can do that, if you can manage well, life is good because it's all about the people. I knew right away that Amy and Doug Lee – Amy still works for me, by the way.

NELSON: Amy?

BALDWIN: Feldman. She's the Senior VP of HBO Scheduling and Administration now, been with me since day one. Doug Lee who was there running Cinemax has had a great career. He's at MGM now managing all of their digital initiatives, their channel that they just launched in HD, and I had drinks with him just the other night. This is family. These people kept me straight, kept me on top of things, loyal, and all I had to do was put the right tools in their hand and reward at the right time and it was like, yeah, I like this management stuff. It's kind of like teaching except I don't think either one of them are going to steal their lunch money and there was no fighting on the playground.

NELSON: Well, you make it sound like this isn't really work but of course it is.

BALDWIN: Well, it's work, but you know what? It's honest work and it's fun work and it's the kind of work that I started to enjoy right away, managing people and processes, and then being a translator, taking all that they were doing and then going out to the floor and out to the executive suite and kind of selling the ideas, selling what we're doing, explaining the strategies, the tactics and the like. In essence I found a career that was very teacher like but a lot better money.

NELSON: For sure. Now you mentioned in terms of the scheduling that you had certain anchor things you could plug in there and I just want to focus on a couple of those. The Saturday night movie – that became a signature. How did that come about?

BALDWIN: Not until 1991, interestingly.

NELSON: So until then the movies were much more amorphous, they go here, it goes there?

BALDWIN: Well, you have to know that one of the games that I learned when I came into television that I'd never learned before was backgammon. Backgammon, if you're just going to play for fun is an okay game, you're moving pieces around. If you're playing for money and playing with the cube there's an awful lot of strategies and tactics, and sometimes the more complicated you make it the other guy across the table can't quite keep up with the four moves ahead that you have to play in the point counting. I took that to HBO, that gaming mentality, and throughout the '80s we really gamed it out to... it was a summer month, the hut levels were higher later, we'd move our movies to 9:00 starts instead of 8:00 starts. We pretty much abandoned... we played a lot of our movies with Sunday starts, Wednesday and then Saturday plays, but as the television environment shifted we would sometimes premiere them on Saturdays because the Sunday competition from the networks was killer in-season, in the fall and the winter. So we started migrating some of our movies over to Saturday and of course as soon as rerun season would begin again we'd move it back to Sunday. So while we were trying to finesse according to demography and all those skill sets that we had and all that, the consumer was totally baffled. They had no idea when movies were starting, where to look for them, what the hell is going on and that confusion started being fed back to us in the marketing research. So Amy Feldman came to me one day and she said, "Dave, I've been thinking. What's the worst that can happen if we take all of our new movies and we just anchor them in one spot, Saturdays at 8:00, that's our spot. Wouldn't that be easier for everybody?" This great light bulb when off over everyone's head – well, of course it would! What's the downside? So we invented the HBO Saturday night guarantee, got the marketing folks involved in it and they actually spent in the first year an ungodly amount of money. Remember, this is 1991; they spent 18 million dollars in off-channel advertising about the HBO Saturday night guarantee movie.

NELSON: Just to say, Saturday at 8:00, you be there.

BALDWIN: It was a guarantee and we hung in there through hell or high water, and I had big fights with the guys that were running HBO pictures because "No, I can't possibly play this film at 8:00, it's too early!" "It's not too early for a theatrical. Why is your film so precious? It's going on at 8:00." So it actually changed the nature of our business and a lot of the strategies because a year or two later, after we had established that beach head, we then went to multiplexing and in the world of multiplexing you needed at least some signposts of where things are because now you have an awful lot of programs. There's no system that a consumer can understand our schedules other than do you have what I want right now. So we persisted with the Saturday until we got to the late '90s and then Sundays with series was pretty much along the same lines. Chris Albrecht and I had been talking about where we put our series because you remember before that, in the mid-90s, The Larry Sanders Show, that wasn't a Sunday show, it wasn't a Saturday show. Larry Sanders was a Wednesday show. We had other series that would be a Monday series. And we looked at the opportunities that presented themselves after we launched The Sopranos and after we launched Sex and the City that we could string together probably 26 to 30 weeks by co-oping the Sunday time period and just running a new episode all the time, and we knew we had another series called Six Feet Under coming in. So it was the first time when it became evident that we could with different series own a time period, something that had never been done before. Again, kind of looked at the network schedules which had shifted away from series forms, and all the networks in the late '90s were getting into long-forms again. They were back to buying movies, making movies, and they were really fading in terms of putting their best series on Sunday nights because they wanted their good series mid-week, Thursday particularly because that's a great advertising night because it's the springboard to cars and movies and shopping.

NELSON: Advertisers love Thursdays.

BALDWIN: Yes, they love it.

NELSON: And you couldn't care less about the advertising side.

BALDWIN: Exactly. So Chris said let's just try to own Sunday.

NELSON: So this came from Chris?

BALDWIN: Yeah, he was, although a programmer, he was probably my best boss when it came to tactical scheduling even though he didn't grow up in the discipline. He was a comedian, a nightclub owner, an agent. I would sit with him and he would come up with these fabulous ideas. I'd say, "How did you come up with that? I'm embarrassed that I didn't come up with that! You pay me to do that!"

NELSON: "Can I take credit for it?"

BALDWIN: And I did, I did. Chris, if you're watching, genius! So that's where we are pretty much today. We're right now in a stage where this whole information technology thing is exploding, we firmly believe that there is purpose to having some established anchors, not too many because the consumer's inundated and you can't ask them to remember too many things, and we don't. Just remember our movies are on Saturday and our series on Sunday. Good, we're done. Everything else I can play multiple times on multiplex, I can put on HBO On-Demand, or you can use your DVR and just set up and record the series and capture it yourself.

NELSON: Which is a lot easier than the VCRs which were in a way your enemy back then because programming them... I mean, there were efforts to say, "Use your VCR. You can see this movie that's on at 3:00 in the morning and record it," but of course we know that people were largely baffled by that.

BALDWIN: I remember those efforts. I think that was one of the Showtime ideas, but the fact was at the time most of America had a VCR on top of their television blinking 12:00, 12:00, 12:00. They didn't know how to set the clock, they certainly didn't know how to use a splitter and put it into the VCR and into the television, so whatever they taped had to show up on the television, and nobody was smart enough when they set it up to tell them about the splitter.

NELSON: The DVR obviously changed that. But before we leave Sunday night, not that we ever leave Sunday night at HBO, I just wanted to go back to that for a second. Was it really first Sex and the City and then The Sopranos? You had a strategy but you had to have the programming that would make that work.

BALDWIN: Yes, we had to have the programming that worked and the first thing was to make sure that we had a sequencing of these shows coming in. We didn't go for 52 weeks right out of the block but we did use, interestingly back then, the idea of reruns to lead into first runs. So if we were in the 3rd season, let's say, of Sex and the City I could use last season's 12 episode doubled down for an hour in six weeks to lead up to it. So you'd fill in between seasons until we got to the full inventory phase of '99-2000 where it was just hell's a popping. We had the three S's – Six Feet Under, Sex and the City and Sopranos that are sequenced out and you could just sense the flow going through the whole year and you transition from one hit to another hit to another hit. It was fun.

NELSON: And why 9:00 instead of 8:00? Primetime typically starts at 8:00 but you always picked that 9:00 Sunday night. It seemed to be the fulcrum point.

BALDWIN: There were many, many reasons. Tactically, in the fall you never get to a clean 8:00 because of the overruns from football which CBS loves because that pushes 60 Minutes and if CBS can push 60 Minutes that means they can feed their next show and their next show and their next show. So that's a phenomenon that will never stop. And you have the sense that a lot of our shows were adult in nature and meant for grownups and parents, and by 9:00 at least if they weren't in bed, the young'uns were at least out of the room where mommy and daddy were going to watch TV, and the demography shifts, it gets younger. The earlier hours, 6:00-8:00 really dominated by the 50+ demos. As you get later in primetime, 9:00-10:00, you start seeing more of the 18-34s come on the scene and be available, and a lot of our shows, obviously, had great appeal for 18-34s.

NELSON: Now you just mentioned sort of avoiding the power of 60 Minutes which has always been a powerhouse on the schedule. When you're doing that scheduling, how much are you concerned about what the broadcast networks are doing, what other cable guys are doing, or are you just saying we're HBO, it's not TV and we're going to do what we're going to do?

BALDWIN: It's about 50/50. We're aware of what's there, but we also know that anytime I premiere a show in a time period, depending on the series or the movie, that's really no more than 20% of its overall viewership and so I'm not going to get really excited because we're not selling airtime, we're not in the ratings battle even though most of the media writers still think we're in a ratings battle. It's not about time period ratings or premiere ratings; it's about how you close the show. In a parallel universe, theatricals, they like to open big but they sure do like to ring the bell six weeks down the line where they stay big and they end up with 100 million dollar picture. For HBO, we know which ones have the potential of starting big, but we also know which ones you need to help along with on-demand offerings and the fact that Nielsen now can measure DVR playback, and we tally all those now and start staying, "No, our goal is total audience," which interestingly was where I walked in the door in 1978. Before technology ever started we did research with an 8 ½ by 14 document that was folded over and it was all of the lists of all the programs on the first page that we aired, and we sent this out to consumers and asked, "What do you watch?" Check. "How much did you like it? Excellent, good, fair, poor?" Check. And so all we were caring about was the cume from day one. We didn't ask them "When did you watch it?" Just "Did you see it and what did you think of it?" We did that for originals, the documentaries, the sports and everything and invented a formula. This was, again, going back to Les Dorney, who I mentioned three hours ago, who was a researcher that came down and kind of brought marketing research, satisfied usage, as a concept into HBO because it was a product, it wasn't TV. And so we monitored TSS, Total Subscriber Satisfaction, very carefully by show, by the number of shows, all of that was part of our analysis before we got in bed with Nielsen and time period research. So in a sense, 30 years later after I walked in the door to a company that cared about total audience and satisfaction, through all of the journey we're back to a company that cares about total audience and satisfaction.

NELSON: You haven't gotten very far, have you?

BALDWIN: No! I feel like I'm coming around past the grandstand, waving, "All right, are we ready for another lap?"

NELSON: One of the things that these days figures into total audience is the on-demand side. Now how does that play into your scheduling strategy?

BALDWIN: Now that we've gotten fairly good distribution, and it took awhile for cable to grow its digital base to get us there, but we're now in, I think we're in around 13 million cable homes that have HBO On-Demand. This is out of our total 18 million or so cable base, and the rest of our subscribers are satellite, which can't enjoy the technology yet, and other units. But I mean, that's a pretty good percentage of homes that have HBO On-Demand available and because of that what we do now is on occasion we will premiere a series on On-Demand six days earlier before we get to our linear premiere on HBO on Sunday night. Two reasons: one, because it's going back to the nature of HBO is a special product, we don't sell advertising so we don't care about that number whatever it is, and it's fun to watch something that no one else gets yet or that you can watch on your own time. So we do a lot of that and we're going to do The Wire upcoming in January that way again this season except we talked to David Simon and since this is the last season and the finale we all decided, you know, let's not put the finale on there, on On-Demand, let's let everybody show up on time or watch it later. But it is a big part of our usage, it adds a significant amount of usage to every show, every movie, and it also enables us to use rights that we don't have for linear anymore. Back when we got into the business of being a media company and sold Sopranos rights and Sex and the City rights to basic cable, we held back On-Demand and broadband digital. We sold them linear only. So one of the things that HBO On-Demand does for us is give today's subscribers an opportunity to view the classics and the evergreens, because we always have a number of episodes up there of these great series as well as the complete inventory of things that are on the air now. So it's really a morphed product; it's not just like HBO linear at all. It's separately programmed, my folks spend an awful lot of time thinking through what's the right menu selections, what's the right category, sub-categories for the click downs, all that stuff. But it's been a terrific experience because at the outset, when this was being discussed in the late '90s when it didn't exist yet, the joke was, "When we get On-Demand, Dave you're out of business! Nobody's going to need a scheduler anymore." Not so fast, my friend. They will need someone that decides the menus and the selections and how deep, and also another game that we play is that the cable operators still give every provider a certain number of hours on server and it's like favored nations, everyone kind of gets the same number of hours so we're restricted. We can't put our entire inventory up there that we have in a month so we have to be selective about what those menus look like.

NELSON: Those are sort of like playing under the salary cap in terms of you have so much to work with so you have to maximize the value of it.

BALDWIN: Right, and HBO is a Steinbrenner team.

NELSON: (LAUGHTER) Nice position.

BALDWIN: Yeah, we've got the All-Stars. We'll let them figure out what they're going to do over at Showtime and Starz, but it's a darn good product. It has high satisfaction among the users. Our issue right now is still getting people that are not tech savvy to understand that it's different than VOD, that when you go to HBO On-Demand there's no charge, there's no specific charge, it's a buffet. Eat as much as you want, we don't care. You've paid for it in your linear subscription, this is value-added for you, and as a consequence what you see in the demography of On-Demand differing from linear is that it's a younger base, and knowing that you really can think about, all right, if it's a younger base I'm really going to hit it with Flight of the Conchords, shows that the younger demos want, maybe leave them there a little bit longer. But then you're always trying to entice the older demography to come in and try it.

NELSON: So you're still, you personally, are still in business because how you use this and what you put on there, given the limited capacity you have to play with, is still a significant thing, and I want to ask you one more thing about that because some of your shows, even though your concern is cumulative viewing there is still a sense of appointment-like, you're just going to be there in front of that TV set at 8:59 on Sunday. Now when you release this stuff on On-Demand is there any way that you can see that in fact – because at some point it goes on the server, so there's a point in time – is there any way that people are primed for that, waiting for that, jump on it, or is that just much more of a level consumption?

BALDWIN: Depends on the show, depends on whether it has an established audience.

NELSON: Well, take a big show and established audience, are you saying that...

BALDWIN: So let's take Big Love, for example. Big Love is a show that we don't premiere on On-Demand because we're still trying to develop that notion of it's Sunday, it's 9:00, it's Big Love, in-season. When it gets a certain amount of legs to it maybe we will but it's always a show by show thing. I like having some shows that maintain this signpost anchoring, and then other shows that probably have less overall big show impact on a premiere but have overall growth potential because they're not the kind of things where you need to get in right away, or in the case of The Wire, for example, sometimes because David Simon's dialogue is so accurate and authentic street dialogue that our viewers go back and watch it again. That was the case with Deadwood. David Milch, I mean his dialogue, it was Shakespearian Western.

NELSON: Right, nobody ever heard that before. With a lot of swear words in between, right?

BALDWIN: Some of the soliloquies were just magnificent but your head would spin, where did that come from? And people would go back either on DVR or On-Demand and watch it again and say, oh, that's what it was.

NELSON: So actually that really does enhance the consumer value and satisfaction because they get this opportunity to go check, even something they've seen already they like to go check it out again.

BALDWIN: We said early on, a DVR or HBO On-Demand are actually superchargers for an HBO subscription because we're agnostic, where they watch it, how they watch it, how many times they watch it. We're very serious about the fact that they pay us for the product and anything that allows them to feel good about the value for cost is the business we want to be in. So if we buy great movies, we make great movies, we do series, sports, whatever, as they did back in the '70s when they said we're going to rotate these around, if they paid for it they have an opportunity. We now have even greater opportunities to get to the consumer or to have the consumer get to us, particularly in a world where you've got 200 basics, a lot of television out there. You still have to have a home that has a distinct feel, that has a brand image, and has a tonality of the kind that's carried HBO all these years.

NELSON: Now in terms of you just talked about more places that people can see things, we're moving into an era here where again we're seeing shifts due to the technology where at one point on-demand seems so new, now it's really part of the landscape. Now we're looking at programming moving onto other much more, let's say, unconventional platforms in terms of because they've got small screens and things like that, how are you looking at that as a way to extend your programming, or are you not?

BALDWIN: Good question.

NELSON: Because everyone is kind of buffaloed by this, aren't they?

BALDWIN: Not buffaloed, I'm pondering how much I give away now versus how much is tactical. We acknowledge the shift. One of the things that concerns us a great deal is digital rights management because one of the shifts is place shifting. It's not so much time shifting anymore; in the home and on the television that pretty much is yesterday's game. We figured out that game. Today's game is place shifting to a laptop, to a remote player via Slingbox and other technologies where you can be somewhere else and move the stuff maybe into areas where we're not even licensed to exhibit it. So the rights management of most of the new technology is of primary concern to us, making sure our product's secured. We're not selling advertising so we're in a different game than broadcasters who are now throwing everything against the wall and seeing if it sticks. They have played every experiment they can possibly play and they're still playing more about how to get their shows to the public – imbed the advertising, don't imbed the advertising, charge a buck 99 on iTunes – every model they can go through is to their benefit because their end game is selling ads and amassing the maximum number of eyeballs as a following enables them to fill the mission of their business statement. For us, letting more people into the tent to watch it who are not paying for it is against our primary business. So we have got to be more introspective, more cautious. For two years people were saying I can't believe you and Apple can't do a deal. Two great companies, two great brands, you've got terrific shows – why aren't you guys on iTunes? Everybody else is! For us that's not a good business right now because we still have home video, we still sell DVDs and if you look at a buck 99 per episode, with their business model the only way they do business is if you premiere it the day after or make it available the day after, and for us I've only done 20% of my business on that episode and now I'm out there selling it to everybody? I've still got 80% of my audience I need to find in the next two or three weeks.

NELSON: So you'd be undercutting yourself.

BALDWIN: I'm undercutting myself two ways, audience potential and then to the extent that we sell DVDs that pricing is much higher than a buck 99 an episode. So that doesn't work for us quite. In other areas of the digital initiatives, we're a long-form company. Movies are long-form, our originals have been long form, 30s and 60s. What seems to be happening on the internet right now with MySpace, YouTube, on and on and on, is that the vernacular is short-form, 3-6 minutes pieces.

NELSON: And free.

BALDWIN: And free, with maybe an ad left or right, whatever. But that's not our vernacular. We don't have programmers, writers, people that are focusing on the short-form as an entertainment experience. I'm sure that the next time that you and I sit down when I've been here in the business 60 years we'll probably be there, but somewhere along the line, I think, it's fair to say that all of us in entertainment have to look at short-form programming as the next wave – how we make it, how we make it distinctive, how we make it worth paying for are the keys to our success, not just in reach.

NELSON: Now just to wrap up here, if you're looking back on your career which obviously is still going forward...

BALDWIN: I hope so because I've got a hell of a mortgage!

NELSON: What do you look at or what would you point to as your legacy – I hate to use that word, it sounds like we're getting ready to put you six feet under – or what you would consider your greatest accomplishment? What have you contributed to this business?

BALDWIN: Ah, God, now it's time to pat myself on the back, is that it?

NELSON: Yes, we had to get to that. Generally.

BALDWIN: It's not me, it's all my people.

NELSON: But I mean as a collective.

BALDWIN: I think when I do pack it in and leave, the primary legacy I will leave behind at HBO is something that was taught to me in my first few months when I got there. I had the advantage of having two or three first-class mentors and because they were from Time, Inc., because they were from the gray flannel suit era of Time, Inc. and they were old school, but because we are collectively in that building, that corporation, still pretty old school in terms of how we manage and how we run our businesses, most of the lessons learned were how to conduct yourself in the company. Learn from the old, teach to the young. Your mission is to figure it out, and then try to impart that wisdom to the folks that work for you so that they can be better and smarter and do more things than you could because they have a couple more years that they're going to learn. Second, is big principle, the group generally out-performs the individual. You have a lot of folks coming into business today that are coming out hot from grad school, want the corner office, they want to accelerate rapidly, and this is no different than it was 30 years ago, but they haven't learned to play on a team yet and when you can impart that to your team to say, look, there are no knives going into anybody's back here. It's not tennis singles, this is football, and even the women understand. It's a team effort, you do one thing, you do another thing, you do another thing, collectively we're going to advance what it is that we do a lot faster than if you try to stand up and be a solo act and claim your brilliance and your ideas and then disavow anybody else's. So those lessons of how you pull together and motivate a team... I will say, I mentioned Les Dorney before, I had another really good mentor who was the controller at the time and his name was Bob Becker. His unofficial title was the out of controller. He's a drinking man, was at the time, and some of the biggest lessons I learned about business, about the company, and about how to manage people were at 1:00 or 2:00 in the morning, standing at a bar and just listening to the wisdom of someone that was ten years older, had been in the company for awhile and had experienced how you succeed. The other one, Les Dorney who came down, the biggest thing he taught me was you know, you don't have to paper the company with memos and tell them how smart you are and have it four pages deep. One a month maximum, maybe one every two months, shortlist, people that really are interested and put it on one page because they don't have time to read your bullshit.

NELSON: So after all this, Dave, I guess that you're still the school teacher at heart in terms of how you approach the business and how you approach your people.

BALDWIN: Pretty much, because you have to at least believe that they want to excel. You have to believe that they want to succeed and what I do is just take away the barriers, put the tools in their hands, and put the spotlight of attention on them. If they do something great, fine. But that instills over the years. I can sit in my office and if anything goes wrong, and we have to operate in our business scheduling and then the law of operations which we have to be accurate within a few seconds everyday. There is no error on the broadcast logs, otherwise things screw up. So you operate at that high level of accuracy, someone is going to be human, someone's going to screw up, but what you instill in them is take ownership and come in, "I screwed up," or "I wanted you to hear this first: this happened, I'm taking steps to fixing it and hopefully this won't happen again," or it's just pure human error. That's the kind of spirit you get if you pay attention and manage and it makes life easy. One of the things I did when I got out of teaching is I said I'm never going to wake up in the morning and lie in bed thinking is there a grandmother that hasn't died yet, is there an illness that I haven't had yet, is there any excuse I can use to call in sick? And it was that bad towards the end. So now, basic rule of thumb, is that basic principle, if you wake up in the morning and it's just getting out of bed and saying, "Jeez, I've got this to do today," and you're going through your routines and you never once think that you're not going to work or don't want to, stay in that job.

NELSON: Well, I've really enjoyed this seminar and learned a lot from you. Thanks very much.

BALDWIN: My pleasure, Steve. Good luck with the project.

NELSON: And good luck to you.