Richard Plepler

Ten years ago, HBO and its then-CEO Richard Plepler had one of those problems that most media execs would kill for.

Things had gotten wild in Westeros. The Starks were on the run and the Lannisters were hanging on to power, barely.

In 2014, you could stream HBO's content online with HBO Go, but it wasn't the kind of streaming service we think of today. You actually had to have a cable subscription first or know somebody who did, which for some people started to feel like a secret code passed around through the Millennial Whisper Network.

This new generation was not getting coaxial cords drilled into their homes and paying large bills every month for the cable bundle plus premium channels. But they did want to watch HBO shows.

So HBO needed to create a streaming-only platform, something that could handle tons more traffic than HBO Go, something people could access without a cable sub. And the company wanted to do it all very quickly.

But HBO was not a tech company, so it needed to hire one to help, a company that knew how to take content and create a smooth, usable interface around it.

BAMTEC, which was just called BAM at the time, was known for streaming Major League Baseball. It knew how to handle big event television. It came with stellar recommendations. It was perfect. So Plepler hired the company to build what became HBO Now.

And then the day arrived, the season five premiere of Game of Thrones.

HBO was not the first TV company to build a streaming platform, but it was the first that mattered. And it was the first major media company, a company that had planted its flag on the back of cable, to say we're taking our content directly to the consumer. No more cable subscriptions and bundles and extra costs. You want to watch reruns of Sex and the City, the newest Game of Thrones?

Give us $14.95 a month and you got it. This was such a big deal that it really did feel like a moon landing. And not just to Plepler. HBO Now got the entire industry's attention. Because if HBO was feeling the squeeze from changing viewing habits, so was everyone else.

Disney's Bob Iger was too.

Bob Iger told Klepler that he was considering making an investment too, a big one, an investment in Disney's future. Iger and Disney wouldn't just go out and hire BamTech like HBO did. They'd eventually buy the whole company. Because Disney was not just going to create a streaming option. Streaming was about to redefine its whole business.

This is Land of the Giants, and I'm your host, Joe Adalia. On our final Disney episode, how does a 100-year-old media entertainment company compete with tech giants on their own turf? Who tries to become one of them, to beat them at their own game?

He spent the bulk of his career at the Walt Disney Company, first in the publishing division in the early 90s, and eventually as president of ESPN. Over the course of his own career's ascent, he saw Disney's cable business grow to unprecedented heights of profitability. But in 2012, when Skipper became president and ESPN's performance was so wildly spectacular, something else happened.

The numbers were still enormous, but for the first time, they weren't growing. And Skipper, in his new position, now got to hear how the leaders of the company thought about this loss.

Danger from a completely new way of watching TV and movies that could peel away cable subscribers, undermining Disney's most lucrative division at the time. So why not meet the consumer where they were? Why not make a Disney streaming service to capture the millennial flight from cable? A win was a win, right? Not exactly. Richard Plepler from HBO again.

Internal resources were finite, so dumping a bunch of money into streaming while cable was still so profitable just did not make sense.

And it wasn't like cable was just making more than streaming at this point. Streaming companies weren't really making any money at all. Sure, Netflix technically had modest profits on paper, but it was racking up billions of dollars in debt. But it didn't have to make money.

Wall Street valued Netflix as a tech company and had its blessing to spend, spend, spend because all it cared about was the company's stratospheric growth in subscribers. Netflix could worry about turning a real profit later. Disney was a media company, an old one, a company that had been making profits for decades, paying regular dividends to its shareholders.

It wasn't supposed to spend billions of dollars on unproven projects. It didn't have that kind of leeway. And so Disney waited, and it leaned into what was still working, the cable bundle.