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Showtime cashes in on some twisted characters

A slate that plays on aberrant behavior has helped the channel stand out -- and profit

December 02, 2008|Meg James | James is a Times staff writer.

A drug dealer, a serial killer, a sex addict and a king with a penchant for beheading his comely wives -- bad sorts are doing a lot of good for Showtime.

It's quite a turnaround from five years ago, when the channel was best known for the gay drama "Queer as Folk." Showtime seemed destined to stay hidden in the shadow of HBO, which has long dominated the pay-TV landscape.

But a slate of programming that plays on aberrant social behavior is helping the cable channel stand out from the crowd: A widow in "Weeds" becomes a pot dealer to maintain her upscale lifestyle, a serial killer in "Dexter" is a police blood-splatter expert, a novelist in "Californication" is a cynical womanizer, and Henry VIII in "The Tudors" is a lust-driven young king with marital problems.

The pathology programming, introduced by entertainment chief Robert Greenblatt, has led Showtime to add 1.1 million subscribers this year, an increase of 7% over 2007, for a total of 16.5 million homes. It marks the fifth consecutive year of growth in an industry struggling to keep subscribers.

At a time when broadcast TV is being slammed by a downturn in advertising, Showtime is now one of the most profitable businesses for parent company CBS Corp. This year Showtime Networks, which includes sister channels TMC and Flix, will generate more than $400 million in operating income, up 20% from last year.

"It's clearly the original programming," said Leslie Moonves, chief executive of CBS. "If you have one little show, that's OK, but when you have a number of shows that have buzz, people begin to say, 'I have to have Showtime.' "

Marketing moves

Buzz may be helping -- but so are sweeteners the network is using to attract and retain customers. Showtime has boosted its subscribers during the last year in part by offering promotional discounts, said Deana Myers, a senior analyst with SNL Kagan. In addition, some of Showtime's recent distribution deals provide a financial incentive for cable companies to market the channel.

Such inducements have helped Showtime grow by about 2 million subscribers during the last two years, according to SNL Kagan data.

"They've proven that they could get people to stick," Myers said. "Showtime is in a really strong position right now."

Unlike broadcast networks, which depend on ratings for advertising revenue, Showtime relies upon more-predictable subscriber fees. In addition, the channel also benefits from producing several of its signature shows, which earn additional income from the sale of episodes on iTunes, through boxed DVD sets, and to international networks.

But Showtime faces challenges, including the faltering economy. Cost-conscious consumers could shed premium channels to save money on their monthly cable bill.

"No one knows what might happen because we've never experienced an economic situation like this before," Moonves said. "But Showtime should be relatively stable."

Movie pipeline

And though original series have given Showtime an edge, movies still make up the bulk of its programming -- presenting another problem. This year, Showtime did not renew its contracts with longtime movie suppliers Paramount Pictures, Lionsgate Entertainment and Metro-Goldwyn-Mayer in a bitter dispute over how much to pay.

The deals with the studios wind down during the next two years, and Showtime could find itself in a pinch without a fresh supply of films. "They are going to have a tough time when they don't have those blockbuster movies," Myers said.

Showtime CEO Matthew C. Blank has been working to stock the movie pipeline. He negotiated a seven-year deal for films from independent producer Weinstein Co., and he said Showtime had plenty of time to line up others.

"We're going to have good movies to run because movies are important to our network and our subscribers," Blank said.

Along with developing new hits, Showtime may have a challenge when it comes to extending Greenblatt's contract, which ends in the middle of 2010.

"He can roll up his sleeves, hire a director, make a script better and know who should be cast in a role," said Peter Chernin, president of News Corp., who hired Greenblatt as director of drama development at the fledging Fox network nearly two decades ago. "It's very rare to have someone who can do all those things, and do them well, but Bob is very talented guy."

Keeping Greenblatt happy may be one reason his CBS bosses have allowed him to moonlight as a Broadway producer.

He has been producing the musical "9 to 5," based on the 1980 movie starring Dolly Parton. This time Parton wrote the score, and one of Greenblatt's classmates from Boylan Catholic High School in Rockford, Ill., Joe Mantello, is directing. It completed a two-month run in Los Angeles in the fall and will open on Broadway in April.

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