A Bravo New World

NEW YORK â€”  As Patrick Kearney related it to the Internet chat room, it all started for him during an airing of Peter Medak’s “The Ruling Classâ€�: Suddenly, Bravo was interrupting its shows with commercials.

Kearney, a worker at the Hewlett-Packard facility in Santa Rosa, Calif., fired off an immediate e-mail protest to the film and arts cable network, which previously had limited its commercial interruptions to between programs, not in them. But as a return letter from Bravo made clear, the commercials were there to stay, and Kearney, who says he used to watch Bravo for two to three hours every night, swears he hasn’t turned on the channel since. “Sure, I miss it, but I’m not going to watch foreign films with commercials. I’ll go rent them,� he says.

Bravo says it got about 100 phone calls and e-mails and 50 letters in the first month after the ads were dropped in with no notice on Sept. 28. TV critics have written critical columns. Many disgruntled viewers followed through on their threats and cut back on their viewing of the channel, whose ratings took an immediate dive.

Since then, however, the ratings have drifted back up, although not to their previous levels. But more importantly, Bravo says, the increase in revenues brought by the ads has made it possible for the channel to double its programming budget. That means Bravo will be able to add more original fare, such as a new series, “The Awful Truth,� from journalist-documentarian Michael Moore, that has garnered critical attention, and a four-part miniseries, “The Count of Monte Cristo,� starring French actor Gerard Depardieu.

The channel is majority-owned by Cablevision Systems Corp., whose executives reportedly have been in talks this week with Metro-Goldwyn-Mayer about a possible merger with the struggling film company. This comes on the heels of an acquisition offer from USA Networks Chairman Barry Diller, which Cablevision rebuffed. Kathleen Dore, president of Bravo Networks, declined to comment on any talks about future ownership of the channel, which, along with sister channel Independent Film Channel, would provide an attractive outlet for the film libraries of either USA or MGM.

As to the decision to turn to advertising as a way to fund new series and specials, Dore says: “We think we chose the right road.�

Bravo isn’t alone in its hunger for original programming. In an increasingly cluttered media environment, cable channels are more and more shunning reruns and cheap fare in favor of pricey original programming as a way to garner audience attention and secure coveted space on brimming cable systems. But the burgeoning number of channels means that prices and competition for programming, such as the movie packages that have been a staple of Bravo’s prime-time lineup, have skyrocketed. That’s putting pressure on channels to raise more revenues to fund the new shows. The Cabletelevision Advertising Bureau estimated last week that basic cable networks--those that air ads and are widely distributed--will invest $5.5 billion in programming in 1999, almost double what they spent in 1995.

Facing an Increase in Cost of Programming

Launched in 1980, Bravo started life as a two-night-per-week programming service featuring arts such as opera and ballet. It was meant to help make Escapade, an R-rated movie service that aired on the other five nights, acceptable to middle America, recalls Erica Gruen, who was one of Bravo’s original employees and is now a cable and new media consultant in New York. Very quickly, however, the channels split, with Escapade sold and converted into the Playboy Channel. Bravo, which for its first eight years was commercial-free, added movies, and over the years was able to out-survive rivals, including arts channels attempted by CBS and NBC.

In 1988, Bravo, which as a pay-cable service had been deriving its revenues from high fees to cable operators, lowered its fees and switched to public television-like sponsorships to fund programming, which evolved into full ads between shows.

For most of the last decade, the economic model “worked pretty well,� Dore says. But in the last couple of years, she says, competition for viewers and strong programming led to an increase in the cost of programming that was “dramatic and fairly sudden.�

Where Bravo was once largely alone in focusing on the arts, it suddenly found itself competing for shows with start-ups such as Ovation. Movie packages, too, were suddenly very much in demand.

“At the end of the day, we felt the only way to really compete on an even playing field was to have a second revenue stream,� in addition to the fees that cable systems pay, Dore says. “Our ability to deliver the kind of quality programming we wanted would be enhanced by advertising revenue more than the viewing experience would be diminished.�

Neither “The Awful Truth� nor “The Count of Monte Cristo,� a $20-million European production, for which Bravo paid an undisclosed amount, would have been possible under the old financial model, Dore says. Other ambitious series are coming up, including the 10-part “The Christian Millennium,� a co-production with London Weekend Television, that explores the impact of Christianity on culture and the arts. There are also new episodes of such Bravo staples as “Inside the Actors Studio� and “Bravo Profiles,� including one on the ‘70s pop group Abba.

Bravo’s Audience Desirable to Advertisers

Overall, she says Bravo will be able to double its programming budget, which she declines to specify, as it moves toward getting the 50% or more of its revenue from advertising that most cable channels get. So far, however, industry observers think Bravo isn’t close to that level.

Bravo’s audience--at least when it was commercial-free--is a desirable one to advertisers, notes consultant Gruen. In 1997-98, the channel, citing Nielsen Media Research figures, says it had the highest concentration of any ad-supported network, broadcast or cable, of upscale adults. According to another research company, MRI, the median household income for a Bravo viewer is $58,062, the highest of any cable service, Bravo says.

Bravo’s ratings took an immediate dive in October, after the ads appeared, but since then they have crept back up. In the third quarter of 1998, according to Nielsen Media Research, the channel drew 0.27% of the available audience in prime time; that figure dropped to 0.22% in 1998’s fourth quarter. The channel showed a slight increase during the first three months of 1999, drawing 0.24% of the available audience, which translates into about 112,000 viewers on average during prime time.

Viewership is flat, Bravo says, because as it is being made available in more homes, it is taking some time for viewers to find it. Indeed, the fast-growing service added 6 million cable subscribers in each of the last two years, bringing its total availability to 40 million homes. Why? Programming, again, says Bravo’s Dore. More subscribers began asking their cable systems for Bravo two years ago, when the channel launched its popular “Inside the Actors Studio� series, which features stars discussing their craft with an audience. “It really struck a chord with the audience,� Dore says, adding that the show “brings home what the channel is trying to do, as a place that explores creativity.�

But cable operators also liked the profile of the Bravo audience, which Dore says includes lots of “early adopters,� consumers who can afford and are willing to try new technology--such as the cable modems and digital channels that cable operators are rolling out. Moreover, Bravo is also now offering cable operators two minutes of local ad time per hour to sell, in addition to the eight minutes of national ad time. (Bravo’s total 10 minutes per hour is lower than most other networks.)

The commercials did cause some viewers to abandon the network, Dore concedes. Research showed that what she calls “a small minority of Bravo’s audience� watched primarily for the films and “certainly, that audience has been disappointed,� accounting for the majority of the complaints. But she estimates their ranks as less than 5% of Bravo’s audience. Knowing they were going to be bothered, Bravo created a sister channel, the Independent Film Channel, for those viewers; it shows films uninterrupted, but is available in a paltry 23 million households, of which only about 13 million pay extra to get it.

But even as some viewers jumped ship, Bravo has been able to broaden its audience. Under the old model, Dore says, “the people who watched, watched a lot.� Now, more people are sampling the channel “and over the next 12 months, the key is to get them to come back, as regular viewers.� Early ratings for “The Awful Truth� equaled the channel’s previous top-rated shows, and in select cities where Bravo did a marketing blitz, such as Cleveland, they produced record numbers. (In Los Angeles, however, the series had a disappointing showing.)

Over the long term, Bravo’s strategy is to decrease the number of films it airs. In the meantime, for those viewers who continue to complain, the channel is using focus groups to test different ways of formatting the commercials. It’s looking at showing them more often, but for shorter periods of time, to airing them less often, but in longer bursts, or even limiting them in films altogether, and piling them up during other times. “We want to try to lessen the disruption,� Dore says.

In the end, though, for some viewers that may not be enough. Sandra Bockelman, an attorney in Austin, Texas, says she “tried in vain to get [Bravo] to change their policy,� both calling and sending an e-mail, and trying to rouse support through news groups on the Web.

Once a heavy viewer who watched Bravo four to five times per week, now she only checks in occasionally, and never to watch movies. “I will not watch movies anymore with commercials; it just ruins it,� she says. That’s good news for rivals American Movie Classics, also owned by Cablevision, and Turner Classic Movies, neither of which interrupts its movies. But AMC has recently started carrying ads between its films and fans are nervous that in-movie interruptions are next. Indeed, the commercial-free Turner Classic Movies is now where Bockelman spends most of her movie-watching time. She says: “Their movie selection is better.�