Star names and big budgets are on the line as cable faces web rivals

Will the advent of internet TV sound the death knell for HBO's success story?

When the critically feted US television series Boardwalk Empire bursts on to British screens next month, it will make even the best of our home-grown small-screen dramas look dowdy by comparison.

The lavish serial could also prove a high-water mark in the renaissance of US television which has brought cinematic values – and budgets – to the small screen in recent years.

Analysts argue that the rise of internet television is eating into the business model which allowed the cable company HBO to spend huge sums on Boardwalk Empire and other serials, such as The Sopranos and The Wire, that redefined television over the past decade.

Boardwalk Empire, which will screen here on Sky1, stars Steve Buscemi and records the rise of organised crime in Atlanta, Georgia, during the 1920s. It cost an estimated $70m (£45m) to make, with an hour-long, $17m (£11m) pilot directed by Martin Scorsese. By contrast, the recent ITV hit drama Downton Abbey cost around £800,000 an hour to make, while the costs of the effect-laden Dr Who are around £1m an hour.

Despite HBO's successes, according to Peter Bazalgette, who as creative director of Endemol was responsible for the UK hits Big Brother and Deal or No Deal, there is a "cloud on the horizon" for HBO.

The company makes around $1.2bn a year from its cable subscription service which reaches more homes in America – 28.6 million – than there are in the UK. But HBO has seen its subscribers dip for two consecutive quarters – for the first time in six years – and the figure of 28.6 million is its lowest for four years.

"A quarter of television sales in the US last year were internet enabled," Mr Bazalgette said. "This year will see the launch of internet TV in the UK. The question is whether homeowners are going to pay a lot to subscribe to cable when they can pay as they go and 'graze' on the net. It leaves a question mark over the funding of premium content." Nevertheless, HBO's subscriber base will still allow it to attract the cream of Hollywood talent in the near future.

Next year, the actors Michael Gambon and Dustin Hoffman will star in the HBO drama Luck, about horse racing; while Kate Winslet and Guy Pearce will star in Mildred Pierce, a mini series based on James M Cain's 1941 novel about a Depression-era housewife struggling to keep up appearances.

The other big hit for the channel last year, The Pacific, a mini series about the Second World War, was produced by Steven Spielberg and Tom Hanks, while You Don't Know Jack, a made-for-television movie which aired in April, starred Al Pacino.

The costs may be high but so, too, are the rewards. The Pacific was nominated for 23 Emmys, winning eight. Boardwalk Empire made it into the top 10 of most TV critics' lists of television series of the year, including that of the American Film Institute; and is nominated for three Golden Globe awards, including best TV drama.

"Boardwalk Empire lived up to both its hype and budget, weaving a complex story of good and evil as it crashed on to the shores of Atlantic City in the 1920s," gushed The New York Times.

Peter White, the deputy editor of Television Business International, a leading industry magazine, said that more A-list stars are being drawn to HBO because it offers a creative freedom rare in Hollywood, and also supplies a film-size budget.

"I went to the industry screening for the first hour-and-a-half of Boardwalk Empire and it was like watching a movie," he said. "It cost $17m and there's no way the BBC can compete with that, and ITV doesn't have to. Downton Abbey is a step in that direction, although it was partly financed by America's NBC. A-listers have been working with HBO because they get creative freedom and also the chance to work on projects that result in 20 or 30 hours of screen time."

GEMS AND TURKEYS

A brief guide to the HBO shows garlanded with critical acclaim and those that were critically panned and canned...

The Hits:

The Sopranos (1999-2007)

A mafia soap opera, based on the domestic and business challenges faced by kingpin Tony Soprano (James Gandolfini); set new standards for television drama.

Sex and the city (1998-2004)

Carrie Bradshaw (Sarah Jessica Parker) and her three New York pals tapped into the fantasies of the single, modern working girl.

The Wire (2002-2008)

A slow burner about the Baltimore drugs trade from street corner to mayor's office; raised the bar higher for TV drama.

Six Feet Under (2001-2005)

A multiple Emmy-winning drama about a funeral-home family; laced with black humour.

Curb Your Enthusiasm (2000-)

Larry David wowed the critics with this half-improvised, excruciating comedy about his alter ego.

True Blood (2008)

Created by Alan Ball, of Six Feet Under, True Blood examined the lives of vampires and humans coexisting in Louisiana.

The Pacific (2010)

This Spielberg-Hanks produced mini series about marines during WWII, raked in viewers and Emmys.

The Misses:

Deadwood (2004-2006)

Based on real events, this expensive series, starring Ian McShane, never took off despite sumptuous sets and photography.

John From Cincinnati (2007)

Not even Luke Perry and debuting after the final episode of The Sopranos could breathe life into this tale about the California surfer community. Cancelled after one season.

Lucky Louie (2006)

This vehicle for comedian Louie CK about a blue-collar family in Boston never rose above 1.5 million viewers.

The Comeback (2005)

Starring Friends actress Lisa Kudrow, written by her and Michael Patrick King. Low audiences did for it.

Unscripted (2005)

Produced by George Clooney and Steven Soderbergh, the improvised story of struggling actors with cameos from Brad Pitt and Uma Thurman, proved too much of a vanity project for viewers.

The Mind of the Married Man (2001-2002)

This take on family life from the viewpoint of three good friends in long-term marriages drew a mixed critical response.

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