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Portfolio.com | TV for People Who Don't Watch TV
TV for People Who Don't Watch TV
by Robert Levine September 2007 Issue
A&E couldn’t do it. Neither could Bravo. So why does an unlikely group of investors think it can turn a profit with a television channel about the arts?
RARE AIR Ovation TV's programming includes Matthew Bourne's version of The Nutcracker and an example from the recent Art or Not series: "Beware Live Art." Photograph by: Catherine Ashmore (top left); Illustration by Post Typography
As head of the $13 billion hedge fund that bears his name, Richard Perry has bought large chunks of dozens of companies, including the flower delivery firm FTD, and brawled with Carl Icahn over control of King Pharmaceuticals. Now, depending on the success of his fund’s eight-figure investment in arts channel Ovation TV, he may also become known as the man who hatched the idea for a series with the working title Battle of the Nutcrackers.
Perry had this brainstorm in December in the conference room of Perry Capital, where Ovation’s new management team presented its programming strategy to the company’s board. A group of investors led by Stanley E. Hubbard, a broadcasting entrepreneur from St. Paul, Minnesota, had just purchased the network for an estimated $58 million. Their plan: Build Ovation from a narrowly focused also-ran with limited distribution into a much larger, more accessible channel. Their problem: How do you attract a big enough audience to make money when your core programming—opera, symphony, ballet—can barely break even as live performances without heavy support from philanthropists? Ovation’s only direct competitor, PBS, is a nonprofit.
As Ovation C.E.O. Charles Segars ran down some ideas for shows he thought could broaden the network’s appeal—“making of” documentaries about performing-arts productions, a series on iconic American artists—he stressed that the channel will need to find creative ways to package high culture. Perry figured that within the available archive of dance performances would be several different versions of The Nutcracker. Why not get the rights to show them, he suggested, for a Christmas marathon?
The idea got the green light from Segars, formerly the top programming executive at the Fine Living network, whose mandate is to significantly expand Ovation’s distribution. That will take some doing. Before the sale, the channel was staffed by about a dozen employees, available in just 5 million homes, and aired content that might best be described as esoteric. “They had a three-hour German opera airing untranslated,” Segars says.
Ovation’s new schedule incorporates movies and pop music, and focuses on a different theme each weeknight: performances on Monday, artist profiles on Tuesday, the visual arts on Wednesday, music on Thursday, and film on Friday. The plan is to translate high-art programming into the language of modern television—Battle of the Nutcrackers, for example—without turning off those viewers who might tune in to watch, say, Christoph von Dohnányi conduct London’s Philharmonia Orchestra.
It’s an untested formula. “A&E and Bravo used to cater to this audience,” says Ovation investor Harvey Weinstein. But executives at both channels realized they could draw a larger audience—and make more money—by wading into the shallower waters of pop culture. “Now A&E does Dallas SWAT and Dog the Bounty Hunter,” says Segars.
To be fair, it’s now a different era. When those channels launched, cable looked a lot more like network TV, with relatively few channels vying for viewers’ attention. Today’s cable lineup looks more like a magazine rack, with niche products dedicated to cars, design, and so on. As in the magazine world, the hard part is persuading distributors—in this case, local cable operators—to carry them.
That’s where Hubbard comes in. A major cable and satellite industry player who admits that his personal tastes run more to hockey than Hockney, the C.E.O. of Hubbard Media Group has leverage with local operators. In 1999, when Hubbard and his family sold their satellite broadcasting company to DirecTV, they secured the rights to add three channels to the larger carrier’s lineup. Hubbard called in one of those chits for Ovation in June, instantly tripling its distribution to 15 million homes. But that’s still a small number. Ovation will need to double or triple its audience again in order to reach critical mass for the upscale advertisers it covets. “A Range Rover or a Jaguar is going to fit nicely into this kind of channel,” Hubbard says.
Ultimately, Ovation may need one of those rare breakout hits, like Bravo’s Queer Eye for the Straight Guy or FX’s The Shield, that can lift a small channel from cable obscurity into the national consciousness.
“I don’t think I would show a three-hour German opera,” Segars says. “But I would go behind the scenes and show the singers and the craftsmen and what it takes to put on an opera.” Sounds like Battle of the Nibelungen Stars.