Justice Department portrays HBO as a juggernaut

LOS ANGELES - This fall, executives at HBO grew interested in purchasing a buzzy series from Reese Witherspoon and Jennifer Aniston about the wormy world of network morning programs, according to a person familiar with the network's strategy.

But any hope of landing the scripted project was shot down when the technology giant Apple swooped in with a sizzling offer.

Not only did the maker of the Mac and iPhone toss more money at producers, it offered a two-season commitment without so much as a pilot - the kind of creative carte blanche HBO has been reluctant to provide.

By many measures, HBO appears to be a television juggernaut, powered by 'Game of Thrones,” one of the biggest hits in the history of cable. But as the fantasy series began shooting its final six-episode season last month, the network faced a series of new hurdles. It has no obvious successor to 'Thrones,” and it must contend with a highly competitive landscape in which Apple, Amazon and Netflix pour billions into content.

Industry experts say HBO's problems, among other things, pose a challenge to the Justice Department's effort to block AT&T's acquisition of the network's parent, Time Warner. Justice put HBO's power at the center of its legal action last week, citing the network 18 times in its enforcement action, which said that an internet and cable giant such as AT&T could withhold HBO to disadvantage other providers.

The department's case could be substantially weakened if HBO turns out to be on shakier ground.

'HBO has been the holy grail - they invented the business of subscription television,” said James Goss, a senior analyst at Barrington Research in Chicago. 'But the world is changing. A lot of channels are competing on the programming front.”

HBO, which declined to comment, in some ways remains in a privileged position.

'Game of Thrones” continues to hit ratings highs. The show's popularity - and the subscribers it has drawn - fueled a revenue jump of 12 percent in the third quarter, according to SEC filings with the Securities and Exchange Commission, and the network now tops 130 million global subscribers. And HBO remains a top destination for artists with provocative new ideas.

'I still think of them as a leader in cutting-edge content,” said Jordan Peele, the comedian and actor who directed the film 'Get Out” and recently sold a new show he is producing, the race-themed horror tale 'Lovecraft Country,” to the HBO. '‘Lovecraft' is a great example of their mandate in pushing boundaries.”

But industry experts say that when it comes to the key metric of shows in their prime - several seasons in, with an established fan base but still a large number of seasons ahead - HBO is lacking. It has several scripted series past the five-season mark with dim long-range prospects - 'Curb Your Enthusiasm,” 'Veep” - and a slew of still-unproven newer shows - 'Westworld,” 'The Deuce,” 'Vice Principals”.

Only 'Silicon Valley” and 'Ballers” are past their third season without being near their end - and 'Ballers” has been at best a modest hit.

Just five years ago, HBO had a cluster of hits in the prime of their TV lives, including 'Girls,” 'True Blood” and 'Boardwalk Empire.”