- Showtime working on streaming, deals with providers abroad
- CBS unit may release ‘Twin Peaks’ in bunches of episodes
Talent agent Rick Rosen was sitting at home one weekend in the summer of 2010 when he received an unexpected phone call from David Nevins, the new president of CBS Corp.’s premium cable network Showtime.
Nevins was ordering a pilot for a TV show called “Homeland.” In a matter of days, he had read the script Rosen had given him, shared it with CBS Chief Executive Officer Les Moonves and decided to greenlight it.
“That was pretty ballsy for someone in the first week of his job working for Les Moonves, but he put his conviction behind it,” Rosen said.
Two years later, the action series featuring Claire Danes as CIA agent Carrie Mathison won the Emmy Award for best drama, the first in the history of a network that had always played second fiddle to Time Warner Inc.’s HBO -- the Avis to Showtime’s Hertz, to use Moonves’s metaphor.
Showtime has evolved from an outpost for other people’s movies and erotic dramas like “The Red Shoe Diaries” into a creative powerhouse with a deep bench of popular shows, including “Homeland,” “Shameless” and “Ray Donovan.” The company just scored another hit with “Billions,” a salacious battle of wills between a cocky hedge-fund titan and an ambitious prosecutor, and next year will air a revival of the cult hit “Twin Peaks.” U.S. subscribers reached a record of almost 24 million last year.
Nevins, who was promoted to CEO in January, is attempting to parlay that success into a global sales juggernaut. Showtime is more important than ever to CBS, which said last week it counts the network as one of the company’s two premium brands, alongside its flagship broadcast operation. Since Nevins came aboard in 2010, revenue from CBS’ cable outlets, led by Showtime, has grown 52 percent to $2.24 billion in 2015.
Now the business is starting to hit the limits of growth in traditional TV in the U.S. as viewers flock to new competitors like Netflix Inc. and Amazon.com Inc. Nevins’s answer? The most ambitious expansion in the network’s history.
“They’ve done so much more with that asset than anyone would have thought they were able to do,” said John Janedis, an analyst with Jefferies LLC, who has a buy rating on CBS.
Last summer, Showtime began selling a Web-streaming service targeting the roughly 90 million households that don’t subscribe to the network through their cable or satellite provider.
Showtime’s streaming service will garner at least 4 million subscribers and generate an extra $400 million in revenue by 2020, CBS projected last week. Nevins won’t say how many customers the $10.99-a-month service has now, only that the base has grown steadily and spikes around the release of new shows. Time Warner’s HBO Now, priced at $14.99 a month, is nearing 1 million subscribers. Netflix has almost 80 million subscribers paying as much as $11.99 a month.
To lure new customers, Showtime is spending more on programming and mixing up its release schedule. Rather than debut two or three shows at the same time, as has been common practice, Showtime is spreading out premieres so consumers always have a new reason to subscribe -- and existing customers have a reason to stick around.
TV fans can get Showtime via Amazon and Hulu, which sell the streaming service alongside their own. HBO, which began selling over the Internet before Showtime, hasn’t made similar deals.
In a first for the network, Showtime also will give online subscribers the chance to watch all six episodes of the new comedy “Dice” the day it premieres, Nevins said in an interview. This isn’t a model for dramas like “Homeland” and “Ray Donovan,” he said, but the experiment could change the way Showtime releases some comedies as well as “Twin Peaks,” which could get released online in clusters of episodes.
“When we put ‘Twin Peaks’ out, maybe it’ll be fun to not just do one a week, but to do it in a different way,” Nevins said in an interview with Bloomberg Television.
Showtime must still play catch-up with Netflix, Amazon and HBO, which spend billions on content each year -- and have already introduced streaming services overseas.
Until last year, Showtime had licensed individual programs to pay-TV companies because the network didn’t have enough quality shows to sell a bigger package. It’s a different story now. Increased demand from international buyers has empowered Armando Nunez, chief executive officer of CBS’s global distribution group, to sell Showtime’s library -- and ask for promotion of the brand in international territories.
Canada’s BCE Inc. airs a Showtime block of programming, while U.K.-based Sky Plc offers the network’s content on its Sky Atlantic channel and its Sky Now premium service.
“Showtime is not known at all to a mass consumer audience in Europe,” said Gary Davey, managing director of content at Sky. “But its shows are very well known and very well loved. We are now the custodian of the Showtime brand in Europe.”
Showtime is working on deals with other pay-TV providers, and may sell its streaming service in foreign territories, as HBO does in the Nordic region.
Nevins spent most of his career developing and producing TV shows, and he calls the creative renaissance in TV the single biggest development in the business since he entered it.
On a recent trip to New York, he raced from the airport to the office, where editors were working on a cut of the weekly political show “The Circus.” He hung around until 4 a.m.
Yet now, more than ever, his focus has to be on expanding the business. He said Showtime’s creative strength isn’t reflected in its subscriber total, its deals with some pay-TV distributors or its international sales.
“There’s more ways to get us and more ways for us to sell ourselves than ever before,” Nevins said. “We are starting to get recognized and starting to get paid around the world, but we think there’s an awful long way we can grow to.”