It's Showtime: An Evening with Matt Blank
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Over the past decade, Showtime Networks Inc. has become a leader in the premium cable and satellite television network business, increasing its revenue and subscriber numbers substantially despite intense competition from HBO.
Showtime now has about 23 million subscribers and an estimated cash flow of roughly $900 million compared to $32 million in 1995, the year when Matthew Blank became its chairman and chief executive officer.
Under Blank, Showtime Networks has grown from Showtime and its other two premium TV networks, The Movie Channel and Flix, to include 27 digital channels. It is also the only premium TV network to have increased its subscriber numbers annually for the past eight years, according to the company.
Blank told a nearly packed classroom of members of the Media Management Association on Oct. 22 that three factors accounted for Showtime's financial success over the past decade-its programming, brand and distribution channels.
Much of Showtime's success has been driven by its award-winning original programing, Blank said. He pointed out that about five years ago the company made what many in the business considered a risky move by deciding not to continue paying what it had been paying for big studio movies, and instead invested the money in original programming.
Showtime took a "sequential approach to this programming" with an attitude of "let's kick ass with scripted programming first" followed by pay-per-view sports events and sports documentaries and later documentaries about "culture changing individuals or groups," such as former Vice President Dick Cheney, late comedian Richard Pryor and rap music producer Marion "Suge" Knight, Jr., Blank said.
Then there are Showtime's original hour-long serial dramas whose characters captivate viewers along with brilliant scripts and the right mix of actors.
Blank cited the shows "Dexter" about a Miami forensics expert who is a serial killer by night, "Weeds" about a manipulative single mother who sells marijuana to her neighbors to pay the mortgage, and "Homeland" about a CIA agent obsessed with tracking down an elusive terrorist.
"If you look at our shows, the characters have a lot in common, whether [on] half-hour programs or
serialized shows," Blank said. "[They are] deeply subversive characters existing at or way over the line of respectability in themes that may be difficult to do elsewhere on TV, executed by lead actors who are not hired for their names but hired because we think they can play these roles in a way that these deeply subversive characters will be embraced by our audiences."
The second factor Blank cited for Showtime's success is the Showtime brand, mainly attributable to its programming. Blank said Showtime was a "crappy" brand when he joined the company and "fixing the brand without a lot of money was like turning an oil tanker."
Because there is a "big family thread" to many of Showtime's serialized programs, viewers find themselves rooting for the characters, Blank said, which keeps them coming back season after season.
"We're really not in the eyeball business, but the hearts and minds business," Blank said. "That's the brand. That's how you build the brand."
Showtime's powerful brand has given it considerable leverage with its distributors- cable operators, satellite providers and telecom companies-the third factor that has contributed to the company's success, Blank said.
When satellite operators and telecoms began to aggressively push premium television, Showtime's approach was to string them out and try to improve its distribution deals in exchange for letting them distribute Showtime anytime, he said.
Plenty of new distribution opportunities will arise in the marketplace in the future, which Showtime will take advantage of to keep growing, Blank said.
"There are a lot of new distributors out there potentially," he said. "We just want to be sure that we will be sold and marketed in a way that really puts money in our pocket, [and] we don't want to destroy the current ecosystem where the weather has been very good for us in recent years. But we're going to keep growing, and to keep growing we need new distributors."
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