Every month, HBO loses 4 percent to 6 percent of its audience. These subscribers drop the service because they have moved, are cutting costs or just signed on for a particular show, and they must be replaced to keep subscriber numbers steady.
To combat the departures, HBO has introduced HBO on Demand, a channel that essentially is a revolving library of HBO fare that viewers can watch whenever they want. Currently in two million homes, the service is performing well. Cable operators say it is both reducing churn and encouraging subscribers to sample other video-on-demand services, which the industry sees as a key to its future.
Since Comcast Corp. added HBO on Demand in October, said Dave Watson, executive vice president of marketing, subscriber use of all of Comcast's video-on-demand offerings has doubled, and churn among digital-cable subscribers has dropped between 15 percent and 20 percent.
Of course, continued success still is dependent on HBO maintaining its reputation for high-quality programs that others can't match. That is getting tougher as basic cable channels such as FX make inroads with hot shows like "The Shield" and "Nip/Tuck."
HBO's latest offerings, the short-lived pseudo political reality show "K Street" and its drama "Carnivale" about a traveling circus during the Depression, didn't resonate the way "Sex and the City," "Six Feet Under" and "The Sopranos" did.
Even "Angels in America," its much hyped two-part production, had only so-so ratings.
But Albrecht is not worried.
"'Angels' was a big event, and in most people's minds it was the best thing on television this season," he said. "That in and of itself takes care of what people expect from HBO."
As for "Carnivale," which has been renewed for a second season, Albrecht said it helped the network this fall and can be a very valuable franchise down the road. " 'Sex' wasn't a big hit its first year either," he noted.
HBO's next big venture is "Deadwood," a western from "NYPD Blue" co-creator David Milch. Although it's a period piece, it won't skimp on sexual content and strong language. Much of the action is set in a brothel, and it includes lots of drugs and crime.
In other words, something for fans of both "The Sopranos" and "Sex and the City."