How does HBO do it?

Interesting industry article in MediaLife:

HBO’s “Entourage” seems to have everything going for it: good-looking actors, critical cachet and major buzz, with the media dubbing it this summer’s breakout hit.

The only thing the show does not have, oddly enough, is numbers. While "Entourage” is up 29 percent over last season, it still only averages 2.4 million viewers.

That’s compared to the 8.9 million that HBO’s “Sopranos” averaged in its most recent season, and that's down from the previous year. It’s not even half the more than 6 million that “Sex and the City” averaged in its final season two years ago. In fact, it’s far less than the 3.8 million the network’s “Rome” drew in its debut a year ago, and that show has been canceled following the upcoming second season.

Those 2.4 million viewers are hardly enough to justify the huge amounts of attention “Entourage” receives in the press. But that certainly is not an issue for HBO, and in some ways the show almost defines an HBO hit: cachet, cachet, cachet. Never mind the numbers.

HBO is in the business of attracting new, paying subscribers while holding onto existing subs, and that is driven by cachet. How many people are actually watching “Entourage,” or any other HBO show for that matter, lends nothing to that effort. Since the network carries no advertising, audience size in itself matters little.

What does matter is the perception of hipness.

“Entourage” is currently the one HBO show advancing that perception, but it's doing it in a big way. Already this summer, the “Entourage” boys have appeared on the cover of Entertainment Weekly and received writeups in TV Guide and Time, which referred to the show as a boutique hit.

Other media are less restrained. There are some 700 articles about “Entourage” available via Google News, and nearly a quarter refer to the show as a hit.

This is all helping HBO enormously, despite the flops of “Lucky Louie,” “Carnivale” and “K Street” over the past four years. Its subscriber base rose 2.6 percent during first-quarter 2006, to 28.2 million subscribers, according to Kagan Research.

And while HBO, a unit of Time Warner, does not give out money figures, some estimate that the network has seen profits of $1 billion over the past year. That's through subscriptions, which average $10 to $15 per month, but also DVD sales of “Sopranos,” “SATC” and other shows.

"Entourage" follows a rising Hollywood superstar and his three best friends from back home as they navigate the absurdities of the movie industry and encounter lots of celebrities along the way. It's executive produced by Mark Wahlberg.