NEW YORK — Rising cable rates haven’t stopped viewers from ponying up for programming they feel is superior to what they get on broadcast nets — and Showtime is delivering the goods.
Showtime doubled its subscriber base from December 1995 through March 2001, adding 14.8 million for a total of 29.6 million. The network’s revenues soared by 28% to $798.6 million between 1995 and 1999.
“In the past year or so the network has really gotten traction with our programming, our brand and our economics,” says Showtime chairman-CEO Matthew C. Blank.
That’s quite a turnaround for a network that was foundering below the radar screen.
Executives inside and out attribute the success to changes at Showtime and in technology. The network had a history of “starts and stops,” Blank says, but “in recent years we have been exceptionally consistent in our strategy and internally as well.”
Showtime’s No Limits programming and branding strategy resulted in such attention-getting originals as “Lolita,” “Bastard Out of Carolina,” “The Baby Dance,” “Strange Justice,” “Queer as Folk,” “Soul Food,” and “More Tales of the City.”
Meanwhile, Digital Broadcast Satellite has “created a fertile marketplace for premium networks,” says Blank, adding that Showtime has been the prime beneficiary of the shift.
“HBO is still the big dog on the block, but Showtime has done very well at carving out an area in original programming,” says Michael Goodman, senior analyst at the Yankee Group. “Their No Limits strategy has been important because they were forced to take more of an extreme position to get noticed and they’ve proven successful.”
“We’re very proud of our original movies and series,” says Blank, adding that 60% of subscribers cite originals as “very important,” double the number from three years ago. “That speaks volumes about what we have accomplished.”
Programming chief Jerry Offsay says that when he began pushing for more quality originals seven years ago, “there was lot of skepticism in the trades and even in the company. People asked, ‘Will they be any good?’ ”
“It was a tough adjustment for this company,” Blank acknowledges, but gradually the network shed its reputation as limited to soft-porn and B-movie thrillers, greenlighting projects such as “Hiroshima,” “12 Angry Men” and “Inherit the Wind” as well as the more risque titles.
“We showed the stuff other networks shied away from and it has been good business for us,” Offsay says, attracting not only viewers but critical acclaim and more big-name talent like Helen Mirren, Angelica Huston and Jodie Foster.
“We were ignored by the media and the artistic community for many years,” Blank says, adding that the network didn’t do a good job of reaching out to creative talent.
The network has not selected merely outrageous topics, it has shown savvy by interpreting No Limits to mean presenting views that other networks ignore.
Offsay says one-third of its directors are women or minorities; the network’s series include the Latino-themed “Resurrection Blvd.,” the black-themed “Soul Food” and gay-themed “Queer as Folk.”
Jerry McKenna, Cable One’s vice president of strategic marketing, says that while the shows lack the breadth of appeal of HBO’s series, the quality has definitely increased interest among viewers.
Still, Bill Carroll director of programming for Katz Television Group, says that while some Showtime series have “come into the consciousness of cable subscribers, every network needs a phenomenon, a break-out show (like ‘The Sopranos’) that will gain it higher consciousness with general public.”
Meanwhile, the network has also quietly remade its family programming with astonishing success.
“It’s not good copy for the media but it’s important to Showtime and its consumers,” Goodman says.
Offsay says Showtime used to make 10 family originals a year but “they were all ‘Home Alone’ rip-offs.” He pushed for more ambitious pictures; in the past two years, the network has captured nine of 10 total Daytime Emmy nominations in that category.
McKenna says family programming consistently ranks high in Cable One’s viewer surveys on premium programming. He says it may not drive subscriptions but helps with retention, which is perhaps more important.
“Churn is so difficult for us and reducing it helps the operators and Showtime dramatically.”
Still, it is the No Limits image that defines Showtime. Len Fogge, executive VP for creative and marketing, says, “It has become part of our culture. The brand informs programming decisions.”
But creating that slogan was not as easy as it sounds, he says. “We worked for nearly a year on it. We really did our homework.”
In the 1980s, the network’s core slogan was the generic “We make excitement” but “No limits” promises what Fogge calls “edge-of-your-seat entertainment” and reminds viewers that Showtime offers something broadcast and basic cable can’t.
The irony is that it doesn’t sell against archrival HBO, instead promoting the concept of premium television. But that is appropriate given that much of Showtime’s growth in recent years, Blank says, has been in HBO homes.
“The marketing environment of digital has worked in our favor,” he says.
McKenna says digital and DBS have offered packages and upgrades that often inspire HBO viewers to say, “I’ll take Showtime as well.”
“It’s seen as a reasonable addition to HBO,” Carroll adds.
While Blank admits this has given Showtime an edge in growth over HBO, he points out that Showtime is not merely piggybacking on the leader. “Our brand is far more substantive than ever before.”
Indeed, Offsay boasts that he sees no weaknesses and has the most movies in development.
“Our pipeline is incredibly deep now,” Offsay says, speaking of a 42-page development report with 200 scripts and 26 series pilot scripts.
Blank is certain there will be pitfalls and challenges ahead as technology and society shift.
“If I knew what they were it’d be a lot easier,” he says, “but a strong brand and strong programming are the best way to be prepared for changes in the marketplace.”