While Networks Sputter, Pay Cable Soars

It's not just "True Blood" that has bite. So do "Entourage," "Hung" and "Nurse Jackie."

Indeed, as ad-supported media goes up in flames, the premium cable networks are on fire. 

Somehow, they’re growing.

Showtime added 674,000 new subscribers in the first quarter of this year, at a time when the TV ad market was down double digits and the major broadcast networks were laying off staff, according to data just released by Kagan Research,

HBO added 35,000 subscribers during the same period, while Starz brought in another 380,000. All three networks were up in the fourth quarter, too.

“It’s just a very good time for us,” said Matt Blank, chairman and CEO of Showtime. “Regardless of the cost of subscription cable, consumers see staying home and watching premium channels as a cost-efficient use of their dollars.”

“People are starting to spend their money more wisely, and premium cable is a very good value for the cost,” added Dave Baldwin, executive VP of program planning for HBO. “For the price of taking the family to one movie, you can afford all of HBO.”

The numbers of the shows themselves bear this out.

Look at "True Blood," riding the crest of vampire-mania. In its second season, the HBO favorite is up 39 percent in the ratings over its first season. It's the first real breakout hit for the network, which had been languishing a bit following the departures of “The Sopranos” and programming guru Chris Albrecht in 2007.

“True Blood” is averaging 10.8 million across platforms ranging from linear TV to DVR viewing to on on-demand services.

New series “Hung” (9.1 million viewers across all platforms for the premiere episode) is also performing well for HBO, as is veteran comedy “Entourage” (up 109 percent from last season).

Meanwhile, Showtime, which initially drew 1.4 million viewers to the June 8 premiere of Edie Falco-starrer “Nurse Jackie,” is now touting 5.7 million viewers overall for the pilot, with a trickle of DVR and on-demand precincts still reporting.

The success of the subscriber-based TV model comes at a conspicuous time in the business, with conglomerate heads, including Disney’s Bob Iger, openly discussing plans to converge all content onto online platforms that would charge consumers for access.

And business wise, newly tapped NBC boss Jeff Gaspin told TheWrap last week that "cable is "a superior model." 

Why? Because, he said, cable gets to know its audience and doesn't try to be all things to all people.

Indeed, as media companies struggle to transition their assets and respective revenue models to broadband platforms, they’re finding that it’s the pay-cable networks that are among the most prepared.

“We think the subscription model travels well to other parts of the media world going forward,” said Blank, specifically noting how the already well-established on-demand offerings of Showtime, HBO and Starz should fit well into a broadband world.

 

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