For Starz Entertainment Group, this was a big year, with significant subscriber growth, movement toward advanced-service applications and an impending rebranding effort.
It’s been a big year for Robert Clasen, too. For his role in driving those efforts, Liberty Media Corp., the owner of the premium programmer, tapped him last week as CEO, following a search that also considered outside candidates.
Clasen, a former president of Comcast Cable Communications Inc., had been serving as president and chief operating officer since September 2003.
He succeeds interim CEO Mark Bauman, whose retirement follows that of founder and former chairman and CEO John Sie.
“Bob Clasen has proven to be an extraordinarily effective leader for SEG,” Liberty CEO Robert Bennett said in a statement about the hiring. He cited “new affiliation agreements with seven of the company’s largest distributors” along with “innovative and effective marketing campaigns,” a subscription video-on-demand launch, “the first premium subscription Internet service” and key staff hires.
Clasen said Starz used the settlement of a lawsuit with Comcast Corp. — which had sued the programmer because of terms of a lucrative carriage agreement the programmer had inked with AT&T Broadband before its merger with the Philadelphia-based MSO — as “a slingshot to reintroduce ourselves to the industry.”
As for marketing and acquisition campaigns, Clasen cited efforts with its top four affiliates: Comcast, Time Warner Cable, DirecTV Inc. and Dish Network. Through nine months, Starz added 1.4 million Starz subscribers, pushing its overall count to 13.7 million.
Starz also claims its ratings improved a collective 18% in primetime and 14% in total day across its various multiplexes through November.
Dealing from strength, Starz decided to push ahead with a rebranding campaign that will become official by the end of the first quarter of 2005, Clasen said. The first step was changing the corporate name from Starz Encore Group LLC.
With it will come more emphasis on advanced services such as Starz on Demand and Starz Ticket with Real, the broadband subscription-movie service.
The video channels will bear new monikers and, in some cases, new formats: Starz Theater will be replaced with Starz Edge, a service aimed at the 18-to-34 set, while Starz Kids will meld into Starz Family, offering daypart-appropriate films to children and families.
That combination opens the door for a Starz Comedy channel. Clasen said research for a comedy service scored highly among subscribers, and it plays well to the Starz movie library.
Turning to fiscal matters, Clasen acknowledges programming costs have risen over the past 18 months, in part through on-demand and Internet rights deals with Sony Pictures and The Walt Disney Co.
He said, though, “we’ll see programming increases begin to slow down about 18 months from now.”
In the meantime, Clasen expects to offset much of those higher costs — programming represents the bulk of Starz’s expenses — through more subscriber growth across a variety of platforms.
On cable, he’s looking for continued advances as digital penetration improves. He said it’s been difficult to buttress the customer base in many places, because “you can’t buy through to our premium services until you’re already spending $60 to 70 per month.
“As cable continues to make strides with digital, there will be greater access for our services. We have significant penetration on the satellite platforms. There is a lot of growth in front of us here.”
He also sees gains from Starz Ticket, particularly among young adults: “PlayStation 3 is coming out next year with a Windows operating system through which users will be able to download movies. We think subscription services, as has been the case with HBO, Showtime and Starz Encore, will prove to be a great value for consumers.”
He’s also looking forward to opportunities as telcos mount their latest drive into the video realm.
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While Starz will stay away from developing original series and telepics, Clasen does foresee increased interstitial production. “We want to create content that is compelling that we can run contextually between our movies.” It could be “short bits or bytes about the films, their stars, producers and directors,” which would be appealing on an on-demand basis.
An upcoming James Bond programming stunt will make 17 uncut Agent 007 films available via Starz On Demand and on Encore next month.
“We’ve been looking at four-minute segments of Bond girls and the greatest chases from the films,” he said. “This is cool stuff to augment our library.”