Showtime’s Pleased By iTunes Revenue Split, But Ask Again In A Few Years

imageUnlike NBC, cable network Showtime likes its revenue split with Apple (NSDQ: AAPL) for the shows it sells on iTunes. Apart from that, Matt Blank, chairman and CEO of the CBS (NYSE: CBS) cable programmer, co-hosted a mini-preview of Showtime’s upcoming shows – including returning series like Dexter and The Tudors, as well as new ones such as comedian Tracey Ullman’s State of The Union – in New York this morning. In addition to its Apple arrangement, he and Bob Greenblatt, president of entertainment, discussed preparations for new pilots in the aftermath of the writers’ strike. At one point, catching himself saying “now that the writers’ strike is over” for the ninth time, Greenblatt quipped that TV network execs would soon be able to stop repeating that refrain. Not much new was offered regarding digital initiatives. But Blank did provide some thoughts on the importance of broadband and Showtime’s harmonious relationship with Apple.

iTunes experience: NBC let its contract with Apple die last year because it felt hamstrung by iTunes’ pricing methods. Things are quite the opposite with Showtime. The cable net is blissful about the revenue split it has with Apple on iTunes download sales. Blank touted having at least four shows in the iTunes store’s top 10 TV Seasons listing. And it’s not just the promotional value he was pleased with, but when consumers download shows from iTunes, “They are voting for Showtime. It’s about the ability to keep monetizing and growing the values of these shows on our network. That’s a very big deal for us, even though it might seem like a small slice of the pie.” During the Q&A, Blank said “We very much like the iTunes split. They recognize the value to those of us who own or control licensed content. I love the iTunes brand and it’s a good place to be right now.”

Easy decisions: Despite Showtime’s affection for iTunes, that doesn’t mean the cable net intends to be solely devoted to it. But at the moment, it’s the best game around, although Showtime has similar download-to-own arrangements with CinemaNow, Movielink and Amazon (NSDQ: AMZN). Blank: “If we can find a legitimate provider that can secure our service and market it in an appropriate fashion, pay us the splits we’re looking for, we are open to looking at ways our product can be distributed.” Blank added that the pay-to-download universe will look vastly different in another three- to five years. He did concede that cable networks face much simpler decisions with regard to downloads and broadband syndication, since, unlike their broadcast peers, they don’t have to worry about replacing ad revenue.

Audience interaction: In a conversation with Blank after the presentation, I asked whether Showtime was planning to expand its use of virtual worlds, which it has been using for the past year for the adult drama series The L Word. He also discussed last spring’s launch of the joint venture with Broadband Libraries to create a game service called On Broadband Networks. While neither produce any revenue, both are viewed as a learning experience in terms of building out its web presence. No concrete plans for doing that with any of its new series at this time. As the shows begin rolling out, Showtime will look to see what sort of online venues would be most appropriate. Blank: “Second Life and video gaming are not one-size-fits all formats. We want to do this carefully and and we want to do it well.”

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