HBO brass often makes the case that because it is a pay cable channel that carries no advertising, it doesn't have to worry about ratings. That is true to an extent. HBO's billion dollars in profits comes from subscriber fees as well as sales of its content both here and abroad.
However, ratings do indicate whether a show is catching on with HBO's audience. HBO has close to 30 million subscribers. It is a number that has not been growing in recent years (while its competitors Showtime and Starz have added subscribers) and, in a tough economy, all pay cable channels have to be worried that frugal consumers may decide to save a few bucks.
That doesn't mean every HBO show has to be a home run. Indeed, a massive hit on HBO is considered a flop on a broadcast or basic cable channel that is available in more than 100 million homes. HBO knows it has a diverse subscriber base. It kept "The Wire," its critically acclaimed drama about the drug war in Baltimore, on for five seasons because it appealed to those who liked intellectual political drama as well as viewers who enjoyed a gritty crime show.
But "Luck" was not even a hit by HBO standards, drawing less than 500,000 viewers in its Sunday night time slot. While additional runs during the week and people watching episodes they had recorded earlier likely boosted those numbers, the show's limited appeal made "Luck" a bad long-term bet.
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One reason such creative talent comes to HBO is that the pay cable channel is known for being very patient with its shows. Often, though, the network brings back a show with very limited appeal for a second season and then kills it -- as was the case with the series "How to Make It in America," "Rome" and "Carnivale." In that way HBO has avoided the stigma of having a first-season flop.
