Starz CEO Chris Albrecht gives Stewart Clarke his views on whether there is too much TV, why big names are flocking to work with his channel, and whether a merger with a rival such as Lionsgate Entertainment or AMC Networks is on the cards.
TBI: You have ramped up originals since you joined Starz in January 2010. When do hit the optimum number of your own series?
CA: It depends on what your go-to market model is. In a [‘business as usual’] world, there probably is a ceiling and a critical mass at which point you say ‘alright, this is enough’. But in a world where there is more opportunity to gain subscribers and to reach different demographics other than the ones that are currently the main pay TV users, then maybe more becomes better. Maybe you do invest more in originals because you can model out a return, so it is really about where the revenue opportunities are.
TBI: We recently spoke to Steven Soderbergh, who was very clear that once the deal for new Starz series The Girlfriend Experience was in place, you just let him go and make the show he wanted with no interference.
CA: We try to be supportive of all talent, but he is one of the few guys we do that with, ok here is the money bring us the show.
TBI: Does working with people of the calibre of Soderbergh help bring in other A-list talent?
CA: You’re only as good as the people you get a chance to work with, so the fact you can hang out a sign like The Girlfriend Experience and have Steven Soderbergh talk about what a great experience it is to work at Starz is a pretty good ‘come work here’ message.
TBI: Are the likes of Steven and fellow Hollywood Alejandro Iñárritu [who is working with Starz on drama The One Percent] working in TV because the movie business is so challenged?
CA: The studios are certainly making different kinds of movies, and fewer movies, so that may have something to do with it. Soderbergh insists he is finished with films unless either they change, or he changes. I hear from a lot of people that they think the great creative work is being done in television. Certainly a lot more work is being done in TV, and it has evolved, but I think a great film is still a great film. They are two very different storytelling forms.
TBI: The media landscape has become more competitive. In a world where consumers have a seemingly endless array of programming choices, where does Starz fit in?
The premium space still a unique storytelling platform. Our episodes tend to be longer [than on basic cable and network TV], they don’t have commercial breaks and the content restrictions are less than those even for the basic cable channels.
That allows for a different kind of storytelling. You are not writing for ad breaks – to bring someone back from a commercial – and I think that is still something that is a calling card. So we find ourselves sometimes in competition with the basic cable channels, but more likely we find ourselves in competition with the other premiums, or Netflix.
TBI: What impact is Netflix having on your business and the wider TV sector?
CA: In and of itself, their business model is pretty terrific and those guys have done a great job. I was with [Netflix chief content officer] Ted Sarandos recently and he said ‘I have 22 shows in production right now’. It’s hard to manage 22 shows!
When I first got to Starz we decided we would skip the pilot process and go straight to series and they’re now doing that too. The thing they did do was to drop all of their episode at one time, so were now going to start to experiment with that on Da Vinci’s Demons, on Flesh and Bone, and probably on The Girlfriend Experience.
We’ll air them linearly, weekly, but when the first episode airs we will put [the remaining instalments] up Starz On Demand, so if people want to binge, they can. We’re not selling ad time, so we’re happy to have people watch something whenever and however they want to watch it. That will be unique to us and Netflix.
TBI: Is this the way you plan to release series moving forward?
CA: It’s a little experimental for us, but I don’t think there is any downside. If you like to watch television that way we’ll let you do that because it’s something extra that [customers] are paying for. I think people, more and more, want to watch what they want, when they want, in a way they want to watch it, so this will be a way for us to give them that flexibility.
TBI: Aren’t you are not concerned it will take away from the linear viewing?
CA: It doesn’t really matter to us if this takes away from the linear because this is all about subscribers enjoying it, and total number of views for us.
TBI: You’re clearly keen to explore different ways of getting your content out there. What other opportunities are there?
CA: We talk to the [operators] we are partners with. Maybe there are new distribution models we will have to look at: going more direct to the consumer and reaching the consumer through different portals. It is all about delivering television over the internet, which is what Netflix does. It may show up on your television [set], but it is delivered digitally, over the top, via broadband.
We are going to have to start to think about that and hopefully our distribution partners are going to want to innovate, and get us tor the consumer at a lower price point. There are opportunities starting to surface: HBO has done it with Apple, and Showtime is doing it with Hulu.
TBI: What sort of timelines are you looking at in terms of direct-to-consumer?
CA: I was up at Apple recently, meeting with [Apple senior VP, internet software and services] Eddy Cue and talking about how HBO Now was going. He wasn’t completely transparent because that is his business with HBO, but I think we got some helpful hints about how we might approach it if we decided to do something like that.
TBI: How much are the direct-to-consumer plays that channel groups are making about leverage and strengthening your hand with pay TV operators and platforms?
CA: They’re not going to be happy, but the distributors make a lot of money off Starz and the premiums. I’m not sure, unless they want to self-immolate [they would drop those channels].
TBI: So, theoretically for any channels group, D2C does give you a stronger hand with platforms?
CA: If you are in a fight with a major distributor and your only alternative – if you cant reach a deal – is to come off their platform, you’ve got to send out the message [to viewers] that you need to go elsewhere to see the channel. However, if you are in the market through other portals, you could pretty easily direct them to those and explain they can subscribe to it somewhere else immediately and that they don’t need to switch their internet or basic package. I’m not sure it gives leverage but I think it creates a different dynamic than has existed before.
TBI: Some execs, such as FX boss John Landgraff are saying there is too much drama. Is there too much TV, too much choice?
CA: I think John is saying something that is philosophically true, and if you are in an ad-supported world and there are all these other choices, then fragmentation of the audience starts to affect how much money you can charge for your commercials. There will be, and I think John pointed this out too, some channels that are no longer able to aggregate the kind of eyeballs needed to be able to charge the amount of money they need to keep their programming strategy afloat.
For the premiums, the opportunities in different kinds of distribution are becoming appealing, and eliminate one of the biggest obstacles that has historically been the reasons there aren’t more HBO, Showtime or Starz subscribers, which is you have to buy all of that other stuff before you can get to them. As we know, the number of households with US$75,000 and more [in the US] are not growing. The millennials will watch television too, but that does not mean they are going to go and buy the traditional pay TV pack.
TBI: You have made a conscious effort to reach out to different demos and social groups underserved by premium pay TV, what have you got coming through?
CA: We have [Cuban drama] The Havana Quartet, which Antonio Banderas is attached to, and three or four more shows designed for Latin audiences. That’s something we will concentrate on, and it is a big opportunity as it is an underserved audience in the premium space. We are also doing a really good job with women; The Girlfriend Experience will appeal to young women in ways that are surprising. Riley Keough’s character, Christine, is a fascinating young woman. She is not a victim and everything she does she goes all out for, either as a law student and as a high-priced sex worker.
TBI: You had a programming deal with BBC Worldwide, is that ongoing?
CA: A lot of the people we made the deal with are gone. When we made the deal it was with John Smith, it was with Wayne Garvie, it was Jane [Tranter]. That deal expired, we did two shows with them and the latest Da Vinci’s Demons is coming.
TBI: What is your attitude to coproduction, is there more in the works?
CA: We would love to do more, but it is hard to do as we are pretty adventurous. We have done a lot with the BBC, especially when Ben [Donaldson] was there. We still have a good relationship with them, and would like to work with the UK networks when we can.
It is not so much about saving money at this point because we can afford to do the stuff we want to do, but if you can get a really interesting project it can become something that has more success worldwide. I think as we look to expand our brand outside the US, controlling rights becomes more important, but that does not mean we need to control the rights to everything.
If there continue to be opportunities for us to build brands and do other things overseas – we have Starz Play Arabia – then having the rights to more things becomes important and coproductions are things you really need to think carefully about because you are basically giving up the rest of the world. Unless you’re getting fantastic show at a great price, you think to yourself ‘why am I doing it?’.
TBI: What are your international ambitions for SVOD service Starz Play, which debuted as Starz Play Arabia in the MENA region?
CA: That was an opportunity that came to us, and it was a great way for us to learn a business we didn’t know and to say we’re open to these kinds of opportunities. It has fostered other conversations and hasn’t gone unnoticed. I think in territories that are not particularly competitive, like MENA, we can look for financial partners and put together a team ourselves. If we were going into a more competitive marketplace, we would probably look to partner with a big media player that already existed there.
There is still a cache to American channels like Starz: we bring money, we bring some programming, and we bring expertise in curation and relationships.
TBI: What new shows are coming through that you are excited about?
CA: We have a lot of stuff teed up. We have American Gods, the Neil Gaiman book people have been trying to bring to the screen for a while. We’re casting, looking for a Shadow character, and the guys are writing the scripts. We added David Slade [Hannibal] as the director. He’ll direct the first one or two and stay on as producer/director, guiding the look of the whole show.
The One Percent with Alejandro Iñárritu, who just won three Academy Awards, will star Ed Helms and Hilary Swank, and has Iñárritu’s whole Birdman team. Then we have a show with a young writer called Justin Marks, which is a vehicle for J.K. Simmons (Whiplash) called Counterpart. It’s a little bit sci-fi and we’re very excited about that.
Outlander is growing in terms of its perception and fans, and Survivor’s Remorse and Power are growing for us. Ash vs Evil Dead is premiering on Halloween, and there is nothing like that on TV, that’s for sure.
TBI: That is a lot of original programming, but arguably Starz has never had a defining show in the way HBO, for example, had Oz, The Wire or The Sopranos. Does that concern you?
I’m not sure ‘defining’ is possible by one show anymore, especially if you are going to different audiences. Outlander is a defining show for women 35 or 40-plus, while Power is a defining show for African Americans and increasingly others. Ash vs Evil Dead will be a defining show for fanboys of all ages.
Game of Thrones is in a class by itself in terms of the response on premium, but defining shows are tough in a 25-million home universe when [basic cable] is programming for a 100 million universe. Therefore, the strategy of us targeting people and trying to satisfy the different constituents that make up the Starz subscriber base is working in terms of the engagement we are seeing from those audiences.
TBI: There is a lot of talk about consolidation; Starz has been linked with with Lionsgate and more recently with AMC, for example. Is there a strategic rationale in a successful premium cable group aligning with a basic cable counterpart?
CA: I think there are always benefits that can come from synergies and scale, and if you take two good companies that are executing well on their strategies and you combine them, the chances are you are going to end up with a better company. Having said that, we go into work everyday thinking we are going to be a standalone as far as we can see.
People talk about this stuff, and even though we are not a US$20 billion dollar company, we are a US$5 billion company, and [AMC] are a US$5 or US$6 billion company and Lionsgate is a US$5 or US$6 billion company, it is not so easy to put these companies together. But I think that we’ll probably see some consolidation on the content side over the next couple of years because its just going to star making sense; its going to start to propel growth and I think you can create value that way.