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Courtesy of Pivot

Participant Media plans to shut down its flagging cable TV outlet, Pivot, as the multi-media company continues a makeover that began last fall with the hiring of CEO David Linde.

The channel that created shows like Joseph Gordon Levitt’s crowd-sourced “HitRecord” will go dark some time in the late fall or winter, a decision the company plans to announce Wednesday morning.

Participant founder Jeff Skoll had invested well over $200 million to form the new linear television “network,” but it launched right at a time that viewers — particularly its target audience of millennials — were fleeing traditional television for online alternatives.

Some of the channel’s programs won critical favor, like “Fortitude,” a drama about the oddball denizens of a town in the Arctic,  “Please Like Me,” an Australian relationship dramedy and “Secret Lives of Americans,” a reality-style show with everyday people exposing their secrets via cameras, cell phones and laptops. But Pivot never found a mass audience or made a significant dent in the popular conscience. Parent company Participant has gotten much more traction with feature and documentary films it financed — including “An Inconvenient Truth,” “Syriana,” “Lincoln” and “The Help.”

“We must decide how to allocate resources to achieve the company’s objectives,” Linde said in an interview. “We believe in our ability to create compelling content, and to support our mission we want to expand our output to ensure that we have a steady drumbeat of content available to a global audience.” That content could be distributed via Participant’s own digital platform or sold to other cable and streaming outlets.

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Participant will let the channel go dark, just 3 1/2 years after it paid an unknown amount to buy the Doumentary Channel and the emerging cable network Halogen TV to create pivot. The fact that there is no buyer for the channel underscores the extreme pressure on niche cable channels to survive in a fragmented TV world. Smaller outlets that lack must-have programming are increasingly struggling to hold on to traditional MVPD carriage deals.

Linde said the competitive landscape for a stand-alone, linear TV operation had simply become too difficult. He noted that the reduction in big MVPDs from six to four had reduced the leverage for independent cable operators. The flight of subscribers from cable made attracting an audience even more difficult. Even some of those sticking with linear television have done so via “skinny” bundles that typically exclude obscure outlets like Pivot.  All those demand challenges come as the supply of quality programming has skyrocketed in cost, given the fierce competition in the multi-channel, multi-platform universe.

The company did not reveal how many employees would be laid off as a result of the Pivot shutdown. Management was scheduled to meet with the station’s staff Wednesday to provide details.

“Looking at the environment, we asked ourselves, ‘Can we compete in this market as a standalone cable television network?’” Linde said. “The answer was that we would not have been sufficiently competitive to achieve our larger ambition.” One-time eBay chief executive Skoll created Participant in 2004 with an eye toward promoting the social good, along with making a profit.

Linde said that the impending renewal of some of those deals did not influence the shutdown decision. Over the year that Pivot’s fate was being decided, Participant hired a consultant to lead a search for a strategic partner, in the way that BBC America struck a deal with AMC Networks. But little-known Pivot was not seen as enough of a lure among potential partners such as Discovery Communications, A+E Networks and 21st Century Fox.

Although it became apparent that investing in content was a smarter play than maintaining a legacy linear outlet, Linde said he and Skoll still found it hard to put an end to Pivot. “It’s always a difficult decision to make any time you have to part ways with good people” the CEO said.

In a prepared statement, Linde sought to deflect any of the onus for the shutdown from Pivot’s employees. “The network’s real achievements can be wholly attributed to the Pivot team, of whom we are incredibly proud,” he said. “This very talented group’s commitment to our broader mission has been absolute, and we are very grateful for their significant contributions to the organization.”

Cynthia Littleton contributed to this story.

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