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It's GO TIME for Showtime

7/13/2007 8:06 PM Eastern

A sexy King Henry VIII. A twisted cop who happens to also be a serial murderer. A suburban soccer Mom who makes her living selling pot.

Sounds like the sort of eclectic lineup of originals that over the past decade or so has come from a subscription television network that first introduced viewers to a conflicted New Jersey mob boss and four sex-hungry women living nearby in the Big Apple.

But shows like The Tudors, Dexter and Weeds aren’t from HBO. But it is TV — edgy, innovative original programming, in fact — that is now being rolled out repeatedly by that other premium channel, Showtime.

All of a sudden, it’s Showtime that has a cache of hits under its belt, a knack for creating noise with original programming ideas and the attention and acclaim of TV critics and online bloggers alike. And it’s HBO that is searching for a breakthrough hit to replace the now-retired The Sopranos and Sex and the City — and is doing it without the help of a CEO whose instincts and judgment made the Time Warner Inc.-owned network the envy of the video entertainment industry.

Average viewers for premiere episodes, in thousands
Source: Nielsen Media Research figures supplied by Disney Research
Weeds, 2005 (9 episodes) 383
Weeds, 2006 (12 episodes) 544
Dexter, 2006 (12 episodes) 738
L Word, 2004 (13 episodes) 630
L Word, 2005 (13 episodes) 489
L Word, 2006 (12 episodes) 572
L Word, 2007 (12 episodes) 444
Sleeper Cell, 2005 (10 episodes) 223
Sleeper Cell, 2006 (8 episodes) 148
Huff, 2004 (8 episodes) 270
Huff, 2005 (12 episodes) 241
Dead Like Me, 2003 (12 episodes) 788
Dead Like Me, 2004 (15 episodes) 573
Brotherhood, 2006 (11 episodes) 231
The Tudors, 2007 (11 episodes) 578

FILLING A VOID

Showtime is well aware of the opportunity. The network in late September will for the first time offer new episodes of its three biggest originals — Dexter, Weeds and Brotherhood, its grinding Abel and Cain battle that takes place in Providence, R.I. It will also launch its new David Duchovny vehicle, Californication, which deals with a troubled novelist who takes a ride on the wild side of life. To get the word out, the network is using new-media companies such as Netflix, Yahoo and Google to reach millions of young viewers through free previews of its series while selling original series like This American Life, Sleeper Cell and Weeds via Apple Inc.’s iTunes Music Store to increase awareness and generate income.

But regardless of the buzz Showtime is expected to generate over the next six months to a year, there’s still one undeniable reality: the network’s success — from ratings to cultural significance — will be measured against that of its biggest competitor.

The network has a long way to go to match HBO on many business measures. With 28 million subscribers, HBO more than doubles Showtime’s 14 million subscriber base. And Showtime’s base has remained almost stagnant since 2005.

As for viewership of individual shows, the December 2006 season finale of its most watched series — Dexter — drew 1.2 million viewers. But it paled in comparison to the finale of HBO’s The Sopranos, which garnered 11.9 million viewers.

Showtime executives hate the comparisons to the Time Warner-owned premium TV juggernaut, but understand the benchmarking by viewers and industry analysts that goes on.

“There will always be things happening in the environment, and we can’t control whether HBO, TNT or FX are being successful with their new shows,” admitted Showtime Networks CEO Matt Blank. “What we can control is what Showtime does. Regardless of the environment out there, we have the programming that will break through and give us a leadership position in the category.”

And he believes the network’s time has come. “We think we’re excelling right now,” he said. “Certainly, we would always rather have our competitor a little weaker than stronger. But regardless of what our competition is doing, we have the programming, marketing and brand — not just to compete but to excel.”

FINANCIALLY STABLE

At the very least, Blank said the network isn’t at a make-or-break point in its business.

“It’s sufficient to say that we’ve been growing the business nicely over the past couple of years, and all of this success on the marketing and programming front is contributing to the success of the brand,” Blank said. “We very much like our market position right now.”

Showtime certainly isn’t under financial pressure. While CBS Corp. — which owns Showtime — does not break out the numbers, Miller Tabak & Co. analyst David Joyce recently placed Showtime Networks’ 2006 revenue, including revenue from sister service The Movie Channel, at an estimated $1.072 billion in 2006 — a 6% increase over the $992 million in 2005. And Blank says profit margins are stout, without disclosing actual results.

And at least shows like The Tudors are being discussed in the same rarified air as The Sopranos. An April USA Today article described The Tudors as a show “designed to give Showtime the kind of Sopranos-type breakout hit that has so far eluded it.”

San Francisco Chronicle TV critic Tim Goodman in a column went so far as to say that with shows such as Dexter, Weeds and Brotherhood, Showtime “has a trifecta of top-notch series worth shelling out money to see. The pay channel has been searching for an identity for ages and is slowly proving that you can’t just ignore it anymore.”

That wasn’t the case before Showtime Networks president of entertainment Bob Greenblatt took over the network’s original programming reigns in 2003.

Prior to his arrival from his independent production company The Greenblatt Janollari Studio, which developed HBO’s Six Feet Under, Showtime was a passive player in the original-programming arena. While HBO was rewriting the television landscape with breakthrough shows such as Sex and the City, Showtime sought to target niche audiences with its original offerings.

Shows such as the gay and lesbian-tinged Queer as Folk and The L Word, as well as African-American targeted shows such as Soul Food, earned Showtime kudos for offering diverse content — including awards from the Gay & Lesbian Alliance Against Defamation and the National Association for the Advancement of Colored People. But Greenblatt said none of those shows were considered breakthrough viewer successes.

“There were some shows that were niche-oriented — there was a gay show, a black show and a Latino show. They were all nice shows, but none of them were garnering so much excitement that they increased the value of the brand,” Greenblatt said.

THE GREENBLATT FACTOR

But Greenblatt says the network’s lack of fear in tackling controversial subjects — the network’s terrorist-based series Sleeper Cell for example dared to profile the emotions and motivations of terrorists within an Islamic terror cell. That’s what has helped the network curry favor with both viewers and critics.

“Each show has got to get attention, so we start with hopefully concepts that are immediate-attention getters,” Greenblatt said. “For instance, a domestic comedy about a drug dealer who is a mom is something that we’ve never seen before — it’s controversial and edgy and no other network could do it.”

And viewers are beginning to reward the network for it. The second season of Weeds drew more than half a million viewers on average and a 2006 Golden Globe win for the show’s lead actress, Mary-Louise Parker.

Following Weeds was the network’s most ambitious show to date: a period piece about Henry VIII. The Tudors, at a reported $42 million, was the most expensive miniseries Showtime ever produced. And the show that the network hoped would forever put them on the original program map.

The series debuted strongly — its April 1 premiere drew almost 870,000 viewers, according to Nielsen Media Research data. Add in another 404,000 viewers that tuned in the hour immediately following, and the series starring Jonathan Rhys Meyers as the king, averaged 1.3 million viewers, the most since the service premiered the Kirstie Alley series Fat Actress in March 2005.

Greenblatt said time will tell whether The Tudors, Weeds, Dexter and Brotherhood — a drama that pits two bothers, a mobster and a politician, against each other for control of a small Northeast town — will achieve the cultural phenomenon status that befitted shows like The Sopranos and Sex and the City.

If they don’t, it won’t be for a lack of trying from Showtime’s part. This fall the network will come out of the gates with guns blazing, taking aim at HBO, FX and other cable networks with original episodes for four of it top original shows.

Weeds and Californication will debut Aug. 13 with new episodes, while Dexter and Brotherhood will bow their sophomore seasons Sept. 30. “There’s an overlap where for five weeks we’ll have the comedies and dramas in originals at the same time — the first time we’ll have four shows in originals simultaneously,” Greenblatt said.

As part of its ammunition, the network will take full advantage of the web to make sure its message is heard.

Prior to the debut of Californication, which stars the former The X-Files star Duchovny as a novelist who takes to booze and women to help him clear his writer’s block, Showtime will offer the premiere episode uncut for Netflix.com users to download to their computers, said Rob Hayes, senior vice president and general manager of Showtime Networks Digital Media.

The move follows Showtime’s unprecedented digital media rollout of the premiere episode of the Tudors this past March. More than 2 million viewers watched the episode through more than 20 different broadband and video on demand streaming partners including Comcast, RCN, Atlantic Broadband, Charter Communications, Yahoo, Brightcove, MeeVee, Netflix MSN, ET.com, IMDB, ATT, Mediavillage, Showbuzz, Vox, and Zap2it and AOL.

Hayes said Showtime has successfully been using the Web to increase exposure to its shows since it offered the premiere episode of Fat Actress on yahoo.com in 2005. That drew more than 700,000 streams. “There’s a huge audience that hasn’t seen Showtime,” Hayes said. “We wanted to put our entertainment content out there where the entertainment enthusiasts are going on a regular basis.”

BREAKTHROUGH YEAR?

Renewed interest in Showtime comes as HBO is searching for its next breakthrough hit under its new co-president and programming head Richard Plepler. The network’s recent offerings such David Milch’s surfer series John From Cincinnati, the polygamist-based Big Love and Hollywood-tinged comedy Entourage — all launched under the recently departed CEO Chris Albrecht — have yet to provide the same cultural cache or eyeballs as The Sopranos or Sex and the City.

But will it all be enough for Showtime to finally break out of HBO’s shadow? As of yet, all the talk about its original shows has yet to move the subscription dial for the network.

The network has hovered around the 14 million-subscriber mark since 2005. But Greenblatt said he’s not as concerned about adding subscribers as much as driving revenue and putting out the best product possible.

“Nobody hired me and said if you don’t raise subscribers by 3 million viewers in the next two to three years you’re going to be fired,” Greenblatt said. “We’d love to have more subscribers and more viewers because that increases the buzz and excitement around the whole service, but it’s an incredibly robust business even if that doesn’t happen.”

A portion of that added financial robustness is coming through digital media sales. The network has been successful offering digital downloads of episodes from Weeds, Sleeper Cell and This American Life through Amazon.com and iTunes. In fact at press time, three Showtime series (the first and second season of Weeds and the freshman season of the documentary series This American Life) were among iTunes’ top 10 most downloaded television series. Neither Showtime nor iTunes would reveal specific unit sales.

Given its newfound programming strength, the network feels it is in a position to negotiate better carriage deals with operators. Blank wouldn’t reveal specifics, but Showtime may not necessarily seek better licensing fees.

The network may seek greater positioning with regards to tiers, possibly on par with HBO as the first premium option for subscribers. In many systems, HBO is part of an expanded-basic tier package, with subscribers having to ante up an additional $10 to $12 for Showtime.

Plus, Blank said the network has some deals on the table “where we clearly believe our programming and marketing position has improved substantially enough that we should be awarded at a higher level for what our product contributes to our distributor’s lineup.”

Still, eyeballs are definitely a programmer’s best friend and Showtime still has an uphill climb before it can claim to be a major force within the television landscape according to Seattle Post-Intelligencer TV critic Melanie McFarland.

“For a long time, people saw Showtime as this second-rate, premium channel that had left over movies and cheesy original shows,” she said. “It’s going to take a long time for Showtime to break that perception.”

Unlike traditional broadcast shows, Robert Thompson, director of The Center for the Study of Popular TV at Syracuse University in New York, said Showtime’s original fare has the additional burden of making a viewer proactively pay money to view it.

“If you hear someone talk about [CSI: Crime Scene Investigation] every day at work, you can go home and turn on the TV and you can watch it,” he said. “If you hear someone talk about a Showtime show, you have to make the call and get the subscription or maybe see it at a friend’s house.

“It can’t just be must see TV — it has to be must-call-cable-company-so-I-might-see-TV, and that’s a big difference,” Thompson added.

Greenblatt understands the odds. But he likes Showtime’s chances to finally hit its creative stride … and break out of HBO’s shadow.

“I never underestimate the strength of HBO and their ability to put on great programming, but I think we’re in a great position that we’ve never been in before,” he said. “Nobody’s going to be ignoring us for the next five years.”

September