A year ago almost to the day, Showtime Networks chairman Matthew Blank announced he would be passing the CEO reins to network president David Nevins. Blank had hired Nevins — then the president of Imagine Television, responsible for such hits as Fox’s 24 and NBC’s Parenthood — in 2010 to oversee development of original programming for the premium service and to succeed him this past January, when he stepped down from the CEO role after more than 20 years.
By then, Nevins had already built a stable of successful, long-running original series, including the Emmy-winning Homeland and The Affair, Ray Donovan and Masters of Sex. As CEO, Nevins would be steering into a new digital age full of opportunities and potential pitfalls as the industry at large sorts out a new landscape that includes new over-the-top competition from Netflix, Hulu and Amazon. On the cable homefront, Showtime must also to contend with Emmy darling HBO and rising player Starz for premium TV supremacy.
Nearly six months into Nevins’s term as CEO, Showtime is firing on all cylinders. The Jan. 17 debut of Billions drew its biggest audience ever for a freshman original series. The Damian Lewis and Paul Giamatti-starrer, about an ego-driven billionaire and the ambitious U.S. attorney looking to take him down, finished its freshman run as the network’s most-watched series behind Homeland.
Nevins is high on the music-themed Roadies, debuting June 26, which chronicles the lives of stagehands who build and take down concert sets for rock ‘n’ roll bands. Showtime can also look forward to the much-anticipated 2017 return of director David Lynch’s drama series Twin Peaks.
Nevins is also spearheading Showtime’s continued push into digital, overseeing the rollout of the Showtime OTT service, available on Apple TV, Roku, Hulu, Amazon and other digital distribution platforms. Still, Showtime is building its success in a perilous TV marketplace where a lackluster performance from a high-profile series or a big breakout hit from a competitor could hit the network hard.
Nevins has his hands full guiding the fortunes of the premium programmer but took some time to discuss his strategy for Showtime’s future growth with Multichannel News, B&C and Next TV editorial director Mark Robichaux and MCN programming editor R. Thomas Umstead.
MCN: There’s been a lot of movement in the C-suite at Showtime lately. Is this a changing of the guard?
David Nevins: Matt hasn’t gone anywhere and is not going anywhere anytime soon, but sort of more and more of the daily decisions and budgeting and how we sort of organize ourselves is going through me. It’s been an orderly transition that’s been going on with Matt’s full support and kind of design, you know, going back probably three years.
I think it’s really working well and it’s a good moment for us. A lot of the trends in the business are favoring us right now.
MCN: How is your new OTT product doing?
DN: We’re about 10 months in. You can buy us on top of your Hulu subscription or through Apple or Roku and shortly thereafter Android, Google, and Amazon added us in a similar way as Hulu, and it’s been really working.
Our base business is, I think, as high as it’s ever been through our more traditional satellite/telco/cable distributors. So, there’s been no real cannibalization; we’re at an all time high in that business. And the more direct, sort of OTT business has really worked. It’s now becoming a pretty meaningful contributor to our revenue and it’s growing fast.
MCN: As the transition continues to more digital content, do you see that business rising and this linear side falling, or do you see incremental increases without losing linear?
DN: I don’t know what’s going to happen over time. I’m hoping for growth on both sides of the ledger. Thus far, we’ve seen growth on both sides of the ledger and we’re budgeting growth on both sides of the ledger for next year.
MCN: Do you think it’s a zero-sum game? Do you think there’s a limit, a ceiling, on the growth of over-the-top products and skinny bundles?
DN: There’s a de-bundling and then there’s going to be a re-bundling. And probably when there’s re-bundling, it will be good for us. We’ve taken a very agnostic position. Our attitude is we want to be sold in as many places as possible by as many sellers as possible.
MCN: How does that affect your relationship with the guys that brought you to the dance, the cable guys?
DN: I think they understand it. We’re not going to undercut them. We don’t want to undercut them. And there was cable and then satellite showed up and did good things for our business, and was a little competition to the cable guys. And then the telcos got into the business, and I think they understand that’s how the world works. So it’s kind of baked in.
MCN: Are you surprised by all the OTT competition?
DN: I come in as a programmer and as a producer, but with real interest in this sort of marketing and development of the business. It was clear to me five or six years ago, when I was a year into this job, that this is where it was going, because Netflix was already making the shift from DVDs to internet-delivered service.
And, you know, partly because I’m an outsider, it was just like a blinding glimpse of the obvious that delivering over the Internet was where it was eventually going to be, and we had to be ready for it and do it in a way that creates a good user experience. And we began building for it a while ago, so we’re doing all our programming, computer programming and service delivery, we’re doing it all in-house. And we’re going to have to start building all the core capabilities of customer service and customer attention that cable companies have spent a lot of time doing. That’s going to be competence that we’re going to have to develop.
MCN: Netflix is spending a pile of money — do you need to spend as much to compete?
DN: No. Still, we’re in expansion mode. So we probably have 11 sort of A-level scripted shows this year. It will be 12 next year, maybe even 13 next year, depending on how the year goes. So we’re definitely building up.
MCN: As opposed to what? What would be a typical year?
DN: Six years ago, it was maybe four. So we have definitely built up over the course of time. We have strength throughout the year, so that we’re able to roll from Homeland and The Affair into Shameless and Billions, into Penny Dreadful, into Ray Donovan and Roadies. They’re going to come this summer.
You know, probably in the old business, it was more important to have one giant show that forces the cable operators — like you can’t possibly drop [HBO], because how can you not have Game of Thrones? In the new business, where it’s easy to sign up and easy to cancel, it’s probably more important to have consistency across the schedule.
So we’re putting on two to three new shows a year. This year it’s Billions and Roadies. And next year it’ll be I’m Dying Up Here and Twin Peaks and some things that we haven’t announced yet in the back half of the year.
MCN: Is that sustainable? Do you want to keep that number roughly the same in coming years?
DN: I think it’s sustainable and I think it’s expandable. But we are expected to deliver earnings for our shareholders, so I’m not going to suddenly start spending 100% of our revenue. But the trick is to make your shots count when they come. And Billions counted.
And Billions was noticed. I always knew that certain power circles would love the show, but the question was, would it expand beyond that? And it really did. I mean Billions was our biggest freshman show ever. It was bigger than Ray Donovan and bigger than Homeland. And Roadies is going to count.
MCN: How do you know today that Roadies is going to be big?
DN: You don’t know what’s going to be a hit. I’ve never been great at predicting hits. But I know [if something has] enough cultural resonance and enough entertainment value that it’s going to get traction. It’s going to get noticed. Whether it’s going to hit or be medium, you never know. But if you’re doing something that feels original that is differentiated enough in the marketplace, that’s got enough sticky elements, whether it’s concept or actors or filmmakers behind the scenes who people want to watch, you know that you’re going to get noticed.
MCN: At what moment did you say, “Wow, this is going to connect?” Was it a song? Was it a line that was read by an actor?
DN: For me, the real moment is the script. So when I read a script and I have a certain feeling about it — I mean there’s always a leap of faith that you take. But the moment when I either emotionally connect or emotionally disconnect is reading the script. And then it becomes about trying to fulfill that vision or that’s great about the script.
MCN: Are you more like a third base coach, given your background with the showrunners?
DN: Yes. I love it. You know, you get to work with the smartest, most creative people, and ultimately, it’s their vision and I’m the third base coach; I’m not playing. But I invest in the people who I believe in and you get to make that decision. So it’s third base coach, it’s general manager, to use your baseball analogy, you get to choose who goes on the field and then try to get them to perform at their highest.
MCN: Showtime was once a network of flawed characters: Dexter, Nurse Jackie. What is it today?
DN: I think we really pride ourselves now on a diversity of shows and we try really hard not to copy ourselves. We want each show to carve out its own territory among the shows on our air and among the competition. So [if] there’s a Mafia show, it better be really differentiated from The Sopranos. Let me just say I try hard to stay away from things that are on our air and other people’s air.
But to answer your question, I think our shows have pretty deep characters, rich characters that have depths and layers to them, have kind of a deeper psychology. We’re definitely programming for adults. Now, I think we’re going to get gradually younger. You’ll see us do some things and the next couple years that are maybe slightly younger than the stuff you see on the walls now, but not dramatically so. [We] want to be forward leaning and not sort of going backwards. A lot of television is trying to do what has already had success somewhere else, and we’re trying really hard to lead the pack.
MCN: When Paramount, Metro-Goldwyn-Mayer and Lionsgate left Showtime in 2009 to form EPIX, there was a question as to whether Showtime would be able to make up for the loss of their films. Does the movie business still play a major part in your overall strategy?
DN: Well, I’d say it’s not top of the list. We know that the most important thing in terms of every buying decision that the customer makes, whether it’s to buy or to keep you, or their general perception of our brand, is based on original series. As you know, movies are seen in so many different places in so many different ways, they become more and more commoditized. That said, we’re building up, you know, we’ve added [studios] Open Road, we’ve added STX, which it looks like they’re going to be a big factor and they’ve been a big factor in the last year and a half. And they’re starting to make more adult dramas, adult comedies, thrillers.
MCN: Are you leaning to make more comedies or more dramas?
DN: More comedies, more dramas, documentaries, sports. We made a pretty big push into both sports and documentaries in the last couple years and it’s starting to pay off.
I mean, we’re very well situated right now in the boxing world with [Deontay Wilder] and Anthony Joshua. So there’s a lot of hope for renewed interest in the heavyweight division and we seem to be well-positioned there … and the documentary area is increasingly important. It’s interesting how it drives audiences more and more. And The Circus has really had impact for us.
MCN: The timing was great for The Circus.
DN: The ongoing election — yeah, that was kind of a big risk. You have no idea what you’re going to get. You have no idea whether the campaigns are going to give you any access. And you know, you’ve got to plunk down $10 million before and just hope something good comes out of it. And it really worked.
MCN: And what gave you the cajones to put down the $10 million?
DN: I feel like it’s a kind of documentary that we’ve been working on. I’ve wanted to use this sort of All Access model of very rapid filmmaking that we did for All Access or Inside the NFL or the college football show [A Season With] … for something other than sports.
Just the ability to edit things so rapidly to be able to shoot things on a Friday, have them immediately ingested into an editing machine and be able to spit it back out and put it on the air on Sunday — that would not have been so easy five years ago. When Bernie Sanders hosted Saturday Night Live, that’s Saturday night at midnight, Sunday morning. We were on the air … 14 hours later.
MCN: What other shows do you have high hopes for?
DN: I’m Dying Up Here is based on a book of the same name about the early days of standup in L.A., and it’s a comedy and it’s a drama. It’s Jim Carrey producing. It really gets inside the minds of standup comedy, and it’s Melissa Leo and an interesting ensemble. And of course, next year, Twin Peaks. I’m incredibly excited to see what David Lynch has done. I think he’s one of the living geniuses of our business, and I think he’s going to do something magnificent.
MCN: Post-linear, on-demand viewing is growing. What percentage of viewing is done when a show’s not in season?
DN: Over half. Yeah, they’re all over 70%.
MCN: What does that tell you?
DN: It tells you people have complicated lives. [Laughs.] Television’s gotten more convenient.
But more and more, it’s on-demand. And you know, more topical shows or water cooler shows get more [live] viewers, a slightly higher percentage. But the difference is Homeland maybe it’s slightly over 30%, 35%, watching the live show versus who’s going to watch the rest of the week.
MCN: Why hasn’t Showtime dropped more entire seasons to allow binge-watching?
DN: I fundamentally don’t believe in it. … Our shows are built for hooks, and I think there’s benefit in the water cooler. And if we had to do it all in one week, I don’t think it does justice to the creativity of the shows. Our shows are very hand-crafted. Ray Donovan is going to make noise when it comes on.
MCN: What about selling to OTT providers?
DN: Our shows tend to have a lot of value when they come off of our network because they’re high-quality and they’re only seen in a limited universe, so there’s great demand from Netflix and Hulu and Amazon. We tend to do that only very late in the run, because we want people to know, “You want Ray Donovan; you want The Affair? You’ve got to go to Showtime.” So we try very hard not to muddy that by making The Affair available; just wait a season and then we’ll come on Netflix. No, you’re going to have to wait years if you want to wait for Netflix.
MCN: You’ve said in the past that Matt has been very supportive of you. And I’m just curious, what’s your vision of what you want your tenure to be like at Showtime?
DN: My goal is for Showtime to be one of the cutting-edge creative companies making the best content in a very hungry ecosystem looking for great content.
We have the business model already that everybody in the entertainment and media ecosystem wants, which is subscription-based. People see the value of writing a check for our brand on a monthly basis.
And I think also we can be a creative haven. I want, within the Hollywood community, people to feel like, “Go to Showtime, they will take care of you. They will make you the best version of yourself. They will take care of your shows so that you feel when you’re walking in, you’re going to a place where creativity is fostered.”
MCN: Do you think we’re in a content bubble right now?
DN: I think there could be some froth. I don’t think there’s a ton, because it’s a profitable business and there’s a lot of people trying to get their share. There’s already been some failure.
But I don’t see massive contraction because I think there’s enormous demand, and you have a lot of hungry viewers around the world who are getting connected, getting wired and consuming content, enjoying it.