TV NotesWith Homeland,' Showtime Makes Gains on HBO
By Bill Carter, The New York Times
- Jan. 30, 2012
Showtime has long been second to HBO among premium cable channels, but on the strength of its critically acclaimed drama Homeland, it has seized a coveted title from its larger rival: the channel with the most discussed, praised and award-festooned cable show of the year.
At the Golden Globes, Homeland won the best drama award, helping Showtime match HBO in the number of awards won (three) and setting up what could become a more competitive battle between the rivals. As Showtime edges closer to its competitor's subscriber numbers, though, HBO is ready to counter with a host of prominent projects over the next six months.
Awards mean a lot to pay-cable channels. They are particularly important because you are trying to create a sense of value that's worth subscribing to on a monthly basis, said David Nevins, Showtime's president for entertainment. He added, That best-series win is a breakthrough moment that says cutting-edge stuff is being done here.
Offering compelling series is the main way premium channels keep the subscriber cash flowing. We don't think it's an accident that five years ago we were at 13 million subs, and now we're pushing 22 million, Mr. Nevins said.
Showtime has improved its subscriber base to 21.3 million from 13.8 million in 2005, according to the media analysis firm SNL Kagan. Over the same period, HBO has held relatively steady at 28 million to 29 million.
The leveling off of HBO's growth, its executives conceded, can be traced in part to a fallow period in its series development about four years ago, when its entertainment management was going through an upheaval as Chris Albrecht was replaced by Michael Lombardo, the president for programming at HBO, and Richard Plepler, the co-president of HBO.
We had precious little in the coffers, Mr. Plepler said.
Mr. Lombardo added, We were getting a little spooked by our own success. Sopranos' and Sex and the City' were so big, what happened was an inertia to try new things.
HBO famously passed on Mad Men which has collected a trove of awards for AMC and it took time and a full-court press, as Mr. Plepler put it, to bring the biggest names in Hollywood back to HBO.
But HBO never lost the advantages it has always enjoyed, money and brand identity. And those factors have long drawn many stars to HBO.
The talent agency WME represents big series at both pay-cable networks, including Homeland at Showtime and Boardwalk Empire at HBO. Ari Emanuel, the head of the agency, said Showtime was surely becoming more relevant.
Homeland' has helped them, he said. But he added, What we know is there are two iconic brands in cable: ESPN and HBO.
One reason, he said, is that HBO has huge advantages in areas like financial resources, technological innovation and brand recognition. While Leslie Moonves, the president and chief executive of Showtime's parent, CBS, is an executive you never bet against, Mr. Emanuel said, Les doesn't have the economic firepower of HBO.
In recent years, HBO has earned about a quarter of the total annual profits for its parent, Time Warner, generating slightly more than $1 billion annually. Showtime is growing, but remains considerably behind. A Morgan Stanley report on CBS estimated that the cable channel would earn $692 million in 2011.
The channels earn significant revenue from subscriber fees: usually about $16 a month for each subscriber. HBO also owns virtually all of its programming while Showtime owns about 50 percent. (Homeland is owned by the Fox studio.) That means HBO makes more in ancillary sales to international outlets, for example. And HBO has been ahead in distribution expansion, most recently with the mobile app GO, now available to more than five million users.
Audience totals still tip heavily toward HBO. Mr. Lombardo said three series Boardwalk Empire, with 8.4 million; True Blood, with 12.6 million; and Game of Thrones, with 9.3 million were attracting more viewers than any show, save for one, in the network's history. Its biggest all-time hit remains The Sopranos.
By comparison, Showtime's most popular series, Dexter, reached 5.5 million viewers in its latest run. Homeland drew an average of 4.4 million. Still, Showtime is demonstrating consistent growth, with its new series House of Lies up 13 percent from the initial numbers for Homeland, and the second-year drama Shameless up 61 percent over its first season.
Mr. Plepler of HBO said, It's not a zero-sum game. A lot of good work is being done. He mentioned several shows on other networks. Our job is to play our game, and if we do that we're going to have more than our fair share of quality and more than our fair share of brand recognition.
HBO is positioning itself to meet the challenge from Showtime and other cable rivals like AMC and FX with a coming roster of programming that includes the most prominent group of shows HBO has ever assembled in one year.
We have never had as many new shows premiering as we will have in 2012, Mr. Lombardo said.
The lineup starts on Jan. 29 with the drama Luck, a racetrack series created by David Milch (Deadwood) and directed by Michael Mann (The Insider), which stars Dustin Hoffman and Nick Nolte. Following that is a searingly broad comedy, Life's Too Short, from Ricky Gervais, on Feb. 19.
In March, the movie Game Change, about the nomination of Sarah Palin to be vice president, will most likely stir controversy thanks largely to Julianne Moore's starring portrayal.
In April, Game of Thrones, which has emerged as one of the network's hottest properties, returns, along with two new comedies, Girls, from the young filmmaker Lena Dunham (Tiny Furniture), and Veep, which stars Julia Louis-Dreyfus as the first woman to be vice president. And in June, HBO will add Newsroom, the latest television creation of Aaron Sorkin (The West Wing) about the cable news world, starring Jeff Daniels.
That doesn't count the lineup of movies and special projects on HBO's runway, which includes a host of big names like Michael Douglas (as Liberace) and Matt Damon (as his lover); Clive Owen (as Ernest Hemingway) and Nicole Kidman (as his lover, Martha Gellhorn); Al Pacino (as Phil Spector) and Helen Mirren (as his lawyer); and Ewan McGregor (in an adaptation of The Corrections).
Showtime has some big projects of its own, including a drama called Ray Donovan with Liev Schreiber, and a series based on the lives of William Masters and Virginia Johnson, the sex researchers.
Mr. Nevins stressed that both networks were well positioned to cash in on the renewed attention.
We're extremely profitable, he said, though he declined to cite any figures. HBO is extremely profitable. They continue to roll along but it's much more of a game than it used to be.http://www.nytimes.com/2012/01/30/bu...nes&emc=tha210