Exclusive Interview: SPT’s Andy Kaplan

March 8, 2012 World Screen
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PREMIUM: Andy Kaplan, the president of networks at Sony Pictures Television, talks to World Screen Newsflash about the strengths of the AXN brand as it celebrates its 15th anniversary.

AXN first launched in Asia in 1997 and has since rolled out in India, Latin America, and much of Europe. Its successful programming mix of high-quality, high-energy entertainment, featuring the best U.S. series and blockbuster movies, quickly expanded to include numerous popular original productions. The AXN brand also grew with the launches of channels like AXN HD, AXN Crime, AXN Sci-Fi and AXN Beyond. Today, the channel has reached such scale and reach that it is viewed as a co-production partner by major networks and producers.

 

WS: AXN is turning 15. What factors have contributed to its success?
KAPLAN: It probably sounds obvious but great programming and marketing. We have created a very strong brand identity with AXN, which now in the minds of viewers around the world equals high-quality, high-octane programming. We were fortunate to acquire the broadcast rights to franchise shows like Lost and CSI in most of our territories and they resonated strongly with the audiences. From there, we’ve continued to acquire the best programming out there and our audience knows that when they tune into AXN, they’ll see the highest quality drama there is.
 
WS: What advantages has Sony had by being one of the earlier players in the international channel business?
KAPLAN: The early mover advantage is very, very significant. Being in a market early not only allows you to get the prime analog real estate but it also allows you to become known to audiences which are new to multichannel pay television. As time goes on, you become a staple of their viewing habits and you can leverage your infrastructure to launch multiple channels. We were able to do this in many parts of the world including India, Japan, Latin America and Central Europe.
 
WS: How have you tailored the AXN brand and programming to different territories?
KAPLAN: AXN is similar in some ways in every territory but at the same time, it is very local. In a territory like Asia, the action is a bit more hard-edged. In a place like Spain or Japan, it’s much more female appealing. At the same time, through consistent branding and marketing, any one traveling the world who is familiar with AXN will recognize it and know generally what to expect. But every country watches television a little differently and has different choices available, so how they use AXN is a case-by-case situation.
 
WS: Once you have launched a channel, at what point do you start investing in original programming? What factors must be in place before you can start making that investment?
KAPLAN: We usually wait until we have full distribution in a market and have a strong enough revenue base to justify the additional programming expense. We also need to be sure we have a strong enough advertising sales infrastructure because original programming is all about appealing to a wider audience to attract a higher rating and ultimately, to attract a broader group of advertisers.
 
WS: Tell us about some of the original productions that are performing well on the AXN channels.
KAPLAN: AXN in Asia produces more original programs than in other territories and they are doing quite well. Cash Cab is doing very well in Singapore and Malaysia, the ratings for Minute to Win It doubled the channel’s average in India and The Amazing Race Asia is number one in its timeslot among international channels in the region, up 37 percent this season and reaching more than 19 million viewers. Our entertainment news show, E-Buzz, airs three times a week in Asia and is seen by more than 20 million viewers.
 
We do original productions in other territories as well, like Italy where we have three successful reality clip shows, Torta di Riso, Torta di Spot and Real Bagatta as well as other original productions like Manswers. In Germany, we are producing two original shows in 3D: Uncut and Play’d. Of course, none of this includes the hundreds of hours of originals we’re producing for SET and our other channels.
 
WS: AXN is a co-production partner with eOne, NBC and Global for the series The Firm. Would you tell us about this co-production and might you be doing more co-productions?
KAPLAN: While we’ve been doing original productions for many years, we were looking for ways to diversify our dependence on acquiring our programming from the U.S. suppliers and also looking to be able to mold creatively high quality programming that would work for our channels in multiple territories. The Firm was the perfect first step in what we hope will be a many pronged programming approach to supplement our main source of programming, the U.S. studios.
 
Our partnership with eOne has been terrific from the beginning. Together, we were able to build an economic model that allowed us to move forward without total dependence on a U.S. network. The NBC opportunity took it from a good opportunity to a great one, and they’ve been great partners as well. Creatively, we’ve been able to work closely with eOne and then NBC to produce a show that works for both the U.S. market and our channels around the world. And the ability to go straight to 22 episodes is quite unique and gives the production the ability to take a long view and plan where the story will go and how the characters will evolve, while also allowing us to produce efficiently and amortize our costs over a full season, from the beginning. We are also able to create a global event, premiering the show around the world on the same day, close to the U.S. premiere.
 
WS: How does the concept of shelf space—more channels in a given territory are better than just one—apply to the digital age?
KAPLAN: I think the idea of shelf space, or grabbing real estate, is important, to a point. I’d rather have three channels in a market than one, but in most cases I don’t think you need seven. The ability to cross-promote across a multichannel platform is important, but having a few strong, targeted channels is more valuable than having a lot of under-penetrated, digital channels.
 
WS: How big of a growth driver is HD?
KAPLAN: HD has become more of the norm. Everything is either moving in that direction or is HD from the beginning. It’s all about the best viewing experience the platforms can provide and as the world moves to the point where everyone has an HD set, they’ll also have HD programming. But it took a decade to get there.
 
WS: How are you using digital platforms, including online, mobile and tablets, to support the linear channels?
KAPLAN: These digital outlets are vital parts of the promotional effort that supports the linear channels. The hardest thing is getting noticed and you need to get to the audience any way you can. These platforms are becoming more and more a daily part of how viewers access information and programming and so we need to be there. Having said that, it hasn’t yet become the outlet for selling advertising that I’d hoped it would by now, but over the long-term, I see it going in that direction.
 
Separately, we have our Crackle business, which has launched in Brazil and Latin America, modeled after our U.S. business. It is a stand-alone, non-linear, advertiser-supported video platform. We believe that there is a market and an opportunity to provide programming to the non-linear audience without trying to compete with SVOD [subscription video on demand]. We’re excited by this and by the opportunities it provides us around the world.
 
WS: Do other divisions of Sony benefit from the firm foothold AXN has in Asia?
KAPLAN: All of our channels around the world work very closely with all of our sister operating divisions—Sony Pictures, Sony Music, Sony Electronics, PlayStation, etc. Our breadth and audience reach makes us a tremendous promotional platform for all of these businesses to leverage our corporate parentage. Take for example, what we were able to do with the MIB 3 [Men in Black 3] trailer in participating in the global debut. We were able to contribute hundreds of millions of eyeballs to this initiative. That’s just one of many examples. And this is true of all of our channels. Take SET in India. Recently a contestant won a million dollars on our original production of Who Wants To Be A Millionaire? SPT distributes the format for the show. The show has delivered huge ratings for SET in India and this big success also really promoted the brand and the format around the world.
 
WS: As viewers want to enjoy programming online or on tablets or on mobile, what do linear channels have to do to remain relevant? Do you see a time when there will be more on-demand viewing than linear viewing?
KAPLAN: The research tells us that while people will enjoy entertainment on many devices, they choose the biggest screen available to them at any given time. I think we still have a very long way to go before there’s a real generational shift from linear channels to non-linear status quo viewing, in many parts of the world. Linear viewing is still the norm of how most consumers get their programming and again, in many parts of the world, this will remain the case for a long time to come. But we can’t be in denial about the direction things could be heading and that’s why we’re trying to be in all places and platforms so we’re ready for everything and available to everyone.
 
WS: Are you still looking to launch more channels in new or existing territories?
KAPLAN: Yes, we intend to continue to launch as many channels as we can where it makes sense. We want more channels where we have a footprint and we want to be where we’re currently not. But it’s getting tougher as competition intensifies so we have to be smarter and on our game and make sure we capitalize on our expertise and our scale.
 
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WS: What opportunities do you see to grow your channel businesses?
KAPLAN: In addition to launching new channels, we are also well-positioned in territories with great growth potential, such as Brazil, where we now program and operate our channels regionally, and in India, where we have a long successful history. We will also be expanding our ad-sales business, where we think there is a lot of potential for growth. But whenever I’m asked this I sort of fall back to more of the same. This has been a good growth engine for the company for the last many years and we think we have many more years of growth in front of us. We’ll get there by sticking to our game plan, being focused and disciplined and opportunistic. With our team, I have no doubt about our ability to continue our success.