Leighton Guides Starz's New 'Originality'

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As president of Starz Encore Entertainment and senior vice president of programming for Starz Encore Group LLC, Robert Leighton wears many hats. Leighton, who joined Starz Encore in 1998 after 17 years at Home Box Office, oversees all aspects of the comp
any's programming division, including program development, co-productions, acquisitions and scheduling. He's also responsible for Starz! Pictures made-for-TV feature films, the first of which —
Joe and Max, which depicted the fights and friendship of boxers Joe Louis and Max Schmeling — bowed in March. In a recent telephone interview with
Multichannel News news editor Mike Reynolds, Leighton weighed in on Starz's moves toward producing more original films, the early returns from subscription video-on-demand and more. An edited transcript follows:

MCN: Starz! has done a number of original movies in the past that have been called 'busted theatricals.' Are you still pursuing these types of projects?

Leighton:
Overall, our goal is to add to the menu of blockbuster theatrical films, so that we have a steady supply of world premiere movies. When consumers decide to watch a movie, they only care about what the movie's about and who's in it. So we're still open to selectively licensing some made-for-theatrical projects.

MCN: In March, you premiered
Joe and Max
, the first film Starz! Pictures developed from start to finish. That's the direction you want to go?

Leighton:
We'll still be selectively acquiring. In fact, we're doing a very good film with Billy Bob Thornton this September called The Badge. But we made a judgment a few years ago that relying solely on the ups and downs of theatrical distribution for that steady supply is too risky.

MCN:
Joe and Max
had a nice critical and audience response?

Leighton:Joe and Max
received more electronic and print press, both nationally and locally, than anything we've done before. Its premiere did just as well as our big theatricals on a Saturday night. To us, that's a knockout.

MCN: Can original films help build your subscriber base?

Leighton:
Press attention is critical, not only for the particular program, but for building awareness for the Starz! service in general. We've only been around for about a third of the time of HBO and Showtime. In many ways, we're still playing catch-up, in terms of awareness. Original programming, if done right, can be a very efficient way to build awareness for who you are.

MCN:
Can you talk budget for
Joe and Max
?

Leighton:Joe and Max
was at the higher end of the scale for made-for-TV movies, around $8 million.

MCN: Within a month, you moved
Joe and Max
to Black Starz! Do you think about the multiplexes when you green-light an original movie project?

Leighton:
We're looking for smart, true stories, projects that are socially and culturally relevant. At the same time, we do have quite a few channels, so we do pay some attention to utility of our channels.

MCN: Will these films premiere on Starz!?

Leighton: Yes, the originals. Documentaries are another story. Some of the acquisitions have been on the other channels, on Action and Love Stories. In the longer term, we certainly want to premiere original projects on the other channels.

MCN: For Starz!, it's about movies, movies, movies. Do series go against that approach, and perhaps undermine an advantage against your competitors?

Leighton:
We still have a film-centric approach to programming and marketing. We don't feel [series would be] the right approach for us now.

MCN: But WAM! America's Kidz Network has a number of series.

Leighton:
WAM!, while exceptional in certain ways to the rest of our group, is increasingly playing movies, including current films targeted to tweens, like Bring It On. But you're right, it has great series —Caught in the Middle, Tribe
and Starters. All of these have been developed with tweens in mind.

WAM! has a very vociferous following. These young people let us know what they want, particularly by e-mail. This is a critical audience of future subscribers for us.

MCN: You did a stunt back in December in which you ran various Bruce Willis films across your multiplexes. Can we expect more of the same?

Leighton:
We're not in the single-channel business any more. This is really taking an old-style scheduling tactic and adapting it to the multichannel digital world. We did a similar stunt aggregating Denzel Washington films, as well as with martial arts and westerns.

MCN: You recently announced a deal with Walt Disney Pictures for animated films. You're getting
Monsters Inc.
Do Disney networks get first crack?

Leighton:
As in most output deals, there are certain exceptions, by which Disney theoretically could play some of those movies, but draw your own conclusions. Monsters Inc.
generated more than $250 million at the box office, and it will be on our air first.

MCN: You recently acquired
Memento
. Are you on the prowl for other independents?

Leighton:
Assembling pay-TV programming is like preparing a great meal. You're combining a lot of different elements, and you're always looking for good movies. We uncovered Memento. We're always at Sundance, Toronto and other less-known film festivals.

MCN: You have output deals with New Line Cinema, Revolution Studios, the various Disney studios, Sony Pictures Entertainment and Vivendi Universal S.A. into 2004. Lots of independent studio deals. Do you have enough fresh films coming in?

Leighton:
In pay TV, you do output deals. We have a lot and we're always out there on the exchange, looking for new sources of supply.

MCN: HBO and Showtime have studio family ties that bind. Are you at a disadvantage in that way? Are viewers that discriminating, in that they might purchase one premium net relative to its output deals?

Leighton:
It's all about delivering value. … In this business, that means good movies and volume. It's not about source of origin. As to your other question, let me back up. Ten years ago did everyone say it would be impossible for this company to start a third pay-TV business? Yes. Was our task made more difficult by not having a studio? Yes. But here we are.

MCN: Where do you stand in terms of SVOD rights with your studio partners?

Leighton:
We have SVOD rights on all our first-run output deals. And we have SVOD rights on almost all of our library deals. MGM. Universal. Disney, Columbia Tri-Star. Paramount. SVOD's still evolving, but we have about 100 different movies per month.

MCN: Do you have to get SVOD rights to do a deal now?

Leighton:
That's a prerequisite.

MCN: Internet rights are something your company hasn't placed a lot of emphasis on. Has that hurt you at all, at this stage in that medium's development?

Leighton:
What is important is that we have the exclusive ability to offer movies throughout our entire window on a subscription basis. That's our fundamental business. We don't feel threatened by the still-theoretical ability of studios to offer individual movies on à la carte basis for pay-per-view pricing — especially since, for a few dollars more, subscribers can have a hugely broader bundle that provides exponential value.

MCN: Any early reads on how SVOD is working for the industry and your company?

Leighton:
We think it's fulfilling the promise. We really think it is going to be the killer app the industry has been waiting for. SVOD will help digital growth rates, ward off DBS [direct-broadcast satellite], and bring in incremental revenues if done right — and also really deliver on those initial promises of truly segmented programming.

We see it as the natural evolution of subscription-based pay. We've remained firm believers that a subscription offering is more attractive and powerful than any à la carte pricing. That's a lesson learned 30 years ago. And so far, we haven't seen anything different in this new SVOD arena.

MCN: What about free on-demand? Adelphia Communications Corp. has been offering it that way. Cablevision Systems Corp. recently changed its tack.

Leighton:
We are wholesalers. We work through a variety of partners. Again, this goes back to the early days of pay TV. Operators are still trying to figure out the optimal way for this platform. So far, research and market information show that consumers are willing to assign a certain value to it.

MCN: So free's not a good thing.

Leighton:
Certainly not for subscription on-demand [laughs]. There are still questions to be answered, but I don't think there's any doubt that you're leaving significant value on the table.

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