As media companies continue to consolidate—with AT&T/Time Warner and Discovery/Scripps mergers on the horizon—it would seem harder and harder for the few remaining independent cable networks to continue sticking it out on their own, especially in a world of skinny bundles.
But at least one of those networks, Ovation, couldn’t be happier to be going it alone, and said its hefty 30 percent volume increase in this year’s upfront shows that advertisers feel the same way.
“At the end of the day, the measuring stick is, are people watching? Are advertisers increasing their business with you? And I can fundamentally say yes to both,” said Liz Janneman, Ovation’s evp of network strategy.
Last fall, the first season of its series Versailles, which is set during the reign of Louis XIV and the construction of the Palace of Versailles, had the highest viewership in the network’s history, drawing 3 million total viewers. (Season 2 premieres on Sept. 30.)
And last month, the network wrapped its upfront sales with volume hikes of more than 30 percent, and CPM (cost per thousand viewers reached) gains in the high single digits. That volume jump was more than triple the percentage gains of even the most successful networks this upfront; it was flat at some networks. “We did not trade price for volume. We could have, but we didn’t,” said Janneman.
In July, TNT and TBS president Kevin Reilly predicted the number of cable channels will decrease and we’ll be seeing “additional consolidation” and corporate alignments. Yet despite the narrative that “independents are about to fall off the face of the earth,” said Janneman, “advertisers rewarded us with a lot more new business. So advertisers are not looking at an independent network versus a conglomerate; they’re looking at, what’s the value? Do you have a meaningful proposition? Do you have an interesting audience composition?”
This upfront, “we’re up double-digits and the conglomerates are up single digits. I would say that advertisers are voting with their thumbs up,” said Janneman.
Ovation’s upfront gains came as its sales team saw an expansion in pharmaceutical and automotive categories, as well as quick-service restaurants and retail, including high-fashion. “We have virtually no attrition,” said Janneman. “We fully expected that we would lose advertisers, that that would be a real challenge to grow revenue.” Instead, “we have sponsors for all of our premium programming, and we’ve secured a considerable amount of revenue for 2018.”
Janneman pointed to the stock market’s anemic reaction to news of the Discovery-Scripps merger announcement as an indication that “consolidation may not be the ultimate point of leverage to push through all of your goods in your shopping cart if all the goods in the shopping cart are not meaningful to stand on their own. I think the MVPDs are pushing back. An independent network has one channel in the discussion. There aren’t so many others that we’re pushing through, so I think in that way the conversations are easier. To get one channel in a skinny bundle, to get one channel in over-the-top platforms, rather than try to leverage 20.”
That said, Ovation is available in 50 million U.S. households, giving it only half the footprint of the biggest cable networks, all of whom are part of larger companies. And it’s currently not available on any of the livestreaming bundles like Hulu, Sling, YouTube TV or DirecTV Now, though “we’re in discussions with all of them,” said Janneman, who expects to have news “soon.”
While the company is celebrating its upfront haul, its struggle to hold its own will only increase in the coming months and years. To stay afloat, Janneman insists that Ovation will remain “true to the brand,” unlike previously arts-focused networks like A&E and Bravo, which ultimately evolved far beyond their cultured roots to grow their audiences.
“What you won’t find on Ovation is trash TV, reality TV … things that potentially do very well in terms of ratings,” Janneman said. “But that’s not where we go at all, and that lane has really fundamentally shaped the nature of the audience profile for Ovation.”
And while many networks are frantically trying to lure millennial viewers, Ovation, which targets the 25-54 demo, says it has no interest in them. “We understand fundamentally that our audience is slightly older, more upscale, educated. We’re not trying to chase the crazy millennials, we’re not trying to chase the 22-year-olds that may be cord-cutting and watching less TV. We’re not rebranding the channel to try to get hipper, younger, cooler,” said Janneman. “We’re very squarely in our space, and we’re very happy there.”