This is the most significant management change at HBO since 2007, when Bill Nelson was tapped to replace Chris Albrecht and oversee a team of three co-presidents: Richard Plepler, Eric Kessler, and Hal Akselrad. Plepler’s appointment, putting him in charge of programming, was most surprising at the time. He had run the company’s public relations — not a typical training ground for such a big job. Now he’ll run a business that’s considered a success for Time Warner. But it also faces growing challenges as pay TV subscriptions stall, rivals including Showtime produce the kinds of attention-grabbing original shows that used to separate HBO from the pack, and digital streaming providers led by Netflix compete for TV viewers who are willing to spend an extra $10 or so a month for additional programming. Kessler becomes COO in addition to President. (Akselrad left in 2008.) Michael Lombardo will remain President, Programming.

Plepler has the advantage of being close to Time Warner CEO Jeff Bewkes, who used to run HBO. He says the operation “will not miss a step with the new team, which has the combination of talent and experience to drive HBO to new heights of creative excellence, innovation, and financial performance.” Here’s the company’s release:

NEW YORK, September 20, 2012 – Bill Nelson, CEO of Home Box Office, Inc., announced today he will step down as CEO of HBO at the end of the year. Under Nelson’s tenure, HBO has enjoyed record revenues and profits; experienced a resurgence in its original programming, most recently earning 81 Emmy nominations, including the most “outstanding series” nominations in the network’s history; launched its acclaimed and popular authenticated streaming service HBO GO; and expanded its international businesses, resulting more than 100 million subscribers worldwide. Under the new management structure, Eric Kessler will serve as President and COO and Michael Lombardo will serve as President, Programming, and both will report to Richard Plepler, who will become CEO.

“Bill and I have worked together for many, many years and though I’m sad to see him leave, I respect his decision to enjoy retirement. He is a world-class CEO and leaves the company well-positioned for the future,” said Jeff Bewkes, Chairman and CEO of Time Warner Inc. “The company will not miss a step with the new team, which has the combination of talent and experience to drive HBO to new heights of creative excellence, innovation, and financial performance. Richard and Eric are twenty-plus year veterans of the company who, as Co-Presidents, helped HBO re-establish its pre-eminence over the past five years, and Mike Lombardo has done an exceptional job in developing the best slate in HBO’s history.”

“HBO has been my home for almost 30 years so this decision was an emotional one,” said Nelson. “With my elevation to CEO more than five years ago, we set an ambitious agenda for HBO, and I’m proud to say that I feel the company has never been in better shape financially or creatively. I feel very comfortable in taking this step now because I know HBO will continue in its tradition of innovation and acclaimed programming and retain its superior position in our industry in the hands of Richard, Eric, Mike and the entire team.”

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