Showtime Networks chairman CEO Matt Blank is embracing the twin engines of subscription-video-on-demand and increased original programming as key to powering the long term prosperity of the pay TV net in a hyper competitive marketplace.
While acknowledging that original product is essential for premium cable nets in a market where movies are fast becoming comoditized, Blank credited the broadcast network’s current obsession with reality TV for giving Showtime access to talent it never would have been able to attract in the past.
“Reality TV has created a real opportunity for us,” Blank told a Kagan Broadband Summit in Gotham Wednesday. “Many writers have been totally disenfranchised by what’s happening in broadcast TV…we’ve got people knocking on our door who wouldn’t have come here in the past.”
Showtime, which has access only to Paramount and MGM titles, knows all too well the vital importance of original fare in a competitive premium TV environment, and like HBO, it’s exploiting not only its subscription profits, but the creative freedom it can offer writers and producers that they can’t get on broadcast or even basic cable nets.
“We’ve seen more appreciation for and expectation among viewers for originals…it’s clearly what’s dirving connections with the younger audiences. Feature films will not drive this category anymore. To contiue to have a strong brand, you have to have proporetary offerings,” said Blank.
Blank touted Showtime’s recently stepped up investment in original series development, including edgy new upcoming lifestyle skeins “Dead Like Me,” “Out of Order”, which he said boasts the look and feel of American Beauty and “The ‘L’ Word,” a kind of female counter-part to its successful “Queer as Folk.”
Blank said the third series of Queer as Folk is having a strong run, as is Soul Food and Street Time, both of are finishing up shoots in SARS-inflicted Toronto. Other recent additions to the Showtime original roster is late night show Penn & Teller: Bullshit.
Blank believes SVOD could evolve into a major revenue stream for the Showtime., but warned that Viacom won’t hesitate to pull its film and TV rights in a full VOD/download universe if they ever detect insufficient control of rights or piracy.
“If the distribution is not secure, we will back off a lot of the things we are doing,” Blank told the gathering of cable investors and tech providers Wednesday.
“We view SVOD as a natural extension of what we do – it potentially adds an additional revenue stream while also adding value to our existing subscription in a crowded environment.
Blank noted that on Time Warner Cable, some 40% of premium subscribers have already opted for the extra SVOD option for $6.95 a month, which indicates the draw of the ‘all-you-can-eat’ offer.
According to Kagan, VOD and SVOD services currently account for rougly $1 billion in annual cable TV revenue, a figure that should double by 2005.
Blank also predicted that virtually all TV households will have some kind of PVR functionality in five years, with the only question being which kind of device will provide it and with what features.
“Just the Pause button can change your life,” he said.