Showtime's CEO on 'Homeland,' the Threat of Netflix and HBO's Goliath Budgets (Q&A)
With his new entry "Ray Donovan," Matthew Blank reveals how he competes against the pay-cable giant's resources: "The more you spend, the harder you can fall."
This story first appeared in the June 28 issue of The Hollywood Reporter magazine.
Matthew Blank's job has grown infinitely easier during recent years.
When the New York native left HBO for rival Showtime in 1988, the premium cable network was not the home of quality programming (Homeland, Shameless, Nurse Jackie) that it is today. "It took an awfully long time to get to the point that people noticed," he says, his ticket to the 2012 Primetime Emmys -- at which Homeland swept the major drama categories -- encased nearby. But with increased competition from rivals old (HBO) and new (Netflix), Blank, 62, hardly is sitting still.
On June 30, his network will roll out an eighth and final season of Dexter, paired with new entry Ray Donovan, and it will air Masters of Sex in the fall for Showtime's 22.9 million subscribers. (HBO boasts 28.7 million, and a significantly larger international footprint.) The married father of two (his daughter owns a New York City boutique; his son works for a hedge fund) sat down in his Midtown Manhattan office to discuss the threat of Netflix, big budgets at HBO and what keeps him up at night.
The Hollywood Reporter: Looking back at your career here, what have been the best and worst days?
Matthew Blank: Winning the [best drama] Emmy for Homeland was one of the great days in my career, not because these awards are so important but because I knew how hard this company had struggled over the years. … The worst? Rather than one day, I'd say the early years here. We saw obstacle after obstacle in front of us in terms of what distributors thought of the brand and the company, our inability to get traction with consumers and how long it took to turn this company around. I like to joke and say, “Oh yeah, I’m an overnight success.” But none of us at Showtime are overnight successes. We’re the tortoise in The Tortoise and the Hare, and that’s fine.
THR: What's the most worrisome thing about the pay TV business today?
Blank: People talk about cord-cutting, but we're still growing. What we worry about most is, are we being priced out of the market as we look to the future? Will it cost $100 a month before you can get Showtime in a lot of environments? How many more subscribers would we have if you could get it as part of a $30 [monthly cable] package? We're not able to answer that question right now, but it is one of the things I worry about.
THR: Looking ahead, what isn’t currently on Showtime that you’d like to see there?
Blank: If five years from now, we had five more great scripted hours and half-hours on the network, we’d be very pleased. If 60 Minutes Sports went from once a month to a little more, that would be great. If this [documentary] initiative had really taken hold, terrific. We’d love to experiment with more personality-driven shows, too. Like a Jim Rome, which was our first foray into that. I think we’re still interested to see what we can do with his show and perhaps others at some point in time. But we’re not sitting here saying, “Gee, we’d love to have five more types of live sports. We’d like to have a daily live morning show.” We know what works for us. Now, if we could give everybody five more Homelands in five years, everything else is moot.
THR: Netflix has caused a stir by not releasing its ratings. If you had it to do over again, would you stay mum about Showtime's viewership?
Blank: Everybody in this business wishes they didn't have to talk about ratings every day, with one exception: when they're good. Then everybody puts out press releases. Let's not kid ourselves. We don't derive a direct revenue benefit from ratings, but if people are not watching us, why are they subscribing? So ratings are important to us; we're just not as focused on who watched us on Sunday night. If you look at our major series, as much as 80 percent of our viewership does not occur on the premiere night. And by the way, I do think that as better types of measurement are used, you're going to see broadcast networks looking a lot better.
THR: HBO CEO Richard Plepler has said 81 percent of his network's viewing is for movies. You made a decision a few years ago to focus on original series instead. Is that still correct?
Blank: We think movies are very, very important, but more and more as things happen in the film business, people are going to have access to the big feature films before the premium TV window. And we see cases of a great library movie title that may perform almost as well as all the great first-run titles. By the way, we want to have more movies on Showtime in five years -- just not necessarily first-run ones. We just think that those dollars are better spent against content that you can’t see anywhere else that we own and that brands us. I don’t think anybody really gives you credit for movies. People sit around at an office the next morning and say, “Gee, did you guys see Homeland? Did you see Dexter last night? Can you believe the ending of Dexter?” Nobody said, “Oh yeah, I love Showtime or HBO because I saw that movie last night.” I just don’t think that’s where the world is going. And we’ve bet heavily that there’s a place for our brand driven by content that we’ve created and in many cases own and that people identify with Showtime.
THR: But until you have original series for each night of the week, what happens come Wednesday or Thursday when you have neither a shiny new show nor a recent movie?
Blank: We’ve never been a place that says, “We’re going to give you morning programming and daytime programming and evening news." That’s just not who we are, and I don’t think anybody expects that that’s the way Showtime is going. But we have a lot more original programming on the network now that’s high-value and high-impact that we think does what you’re saying it needs to do. And by the way, it is interspersed with a lot of movies -- a lot of great titles. And I don’t think people necessarily distinguish a title that’s three years old versus a title that’s one year old versus a title that 10 years old. I’ll watch Animal House every time it’s on. If it was on tonight, I’d watch it.
THR: How do you define the Showtime brand today? And how do new additions -- fixer drama Ray Donovan and sexual drama Masters of Sex -- fit into it?
Blank: There is a subversive undertone to these shows and to our lead characters, going back to Dexter and Nancy Botwin in Weeds. In many cases, it’s far more than deeply subversive; it’s way over the line of respectable behavior. But I think it manifests itself most brilliantly today in Homeland, where Carrie Mathison is a more subversive character than the terrorist. I think we just keep embellishing the voice of the network, and we’re probably a little broader today. And we’re fortunate because we can say that something that perhaps doesn’t have as huge a rating as something else is still a success for us because it reaches a different part of our audience and it helps to define the network.
THR: How important is owning your programming going forward?
Blank: It's important. We've developed a nice revenue stream from owning the programming -- shows like Californication, Dexter and, going forward, House of Lies and Ray Donovan. They generate real money in video, in international and when they're off the air and streaming. If you could own everything, you would. On the other hand, we couldn't own Homeland -- but you wouldn't not do Homeland. Our emphasis clearly is on owning or participating in many more things in the future.
THR: Do you ever look at HBO's budgets, which can be double Showtime's, and get jealous?
Blank: Yes and no. The more you spend, the harder you can fall. We try to produce cost-efficiently, but we know it can cost a lot to do great work -- and we don't spend our money foolishly. We don't make a pilot unless we think there's a really good chance that it's going to make it to air. It's not like every season we make 16 pilots, and maybe we can fill six slots with them.
THR: Netflix has come out of the gate with a lot of buzz for original programming such as House of Cards and Arrested Development. Are you concerned?
Blank: There's no scarcity of original programming. If we put an ad in THR tomorrow, "Looking for half-hour dramas; need to produce soon," the line would be down Wilshire Boulevard, around the Beverly Hilton and back up Santa Monica [Boulevard] with people and their scripts. And one good thing about Showtime is that we spent so many years striving to be successful in a world where all people talked about was HBO that we built a mentality at this company: We can't control what HBO does or what Netflix does, and the best way for Showtime to be successful is to make great Showtime shows.
Outside of your own shows, what do you watch on TV?
Blank: I watch a lot of sports. The Yankees and the Giants are my teams. On network TV, I think Big Bang Theory is the best comedy on TV, and I like NCIS very much. On cable, I like Mad Men and Breaking Bad. And then I consume a lot of news.
When you’re not working, what would we find you doing?
Blank: I read a lot. I play a lot of golf -- not particularly well but it’s great to get out either with my son or my friends. I go to a lot of movies; I collect photography, mostly contemporary stuff -- and we go to the theater all the time. I’m a big believer that if you’re in a business like this every day and you’re trying to create things that consumers are going to want to watch, you need to read a lot, you need to see a lot of movies, you need to watch a good deal of television and you need to see a lot of theater. I’m always sort of amazed when people in the business say, “Well, I don’t watch a lot of television.” I’m always like, “Oh, you don’t? Well, how do you really get a feel for what’s happening out there?”
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