Why Showtime’s ‘Billions’ and ‘Dexter’ are getting the ‘Yellowstone’ treatment

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Through much of Showtime’s 47-year history, the pay-TV network was a proud No. 2 to HBO — though a distant one — sometimes fielding groundbreaking hits such as “Queer as Folk,� “The L Word� and “Ray Donovan.� Never dominant, but long respected. Still, as HBO pumped out bigger shows (“Game of Thrones�) and every streamer and basic cable channel encroached on Showtime’s prestige TV territory, it became harder to compete.

So Paramount Global’s decision to merge the Showtime brand with its Paramount+ service, effectively ending its status as a standalone force in cable and streaming, came with a sense of inevitability, following shortly after David Nevins departed at the end of 2022, leaving ascendant Paramount television executive Chris McCarthy in charge.

Last week’s announcement that Showtime’s programming operation would combine with MTV Entertainment Studios — resulting in 120 layoffs and the stepping down of two longtime executives — contributed to the sense that the venerable brand was being dismantled. “Let the Right One In� and “American Gigolo� were canceled. The Shailene Woodley-led “Three Women� was put on the market and picked up by Starz. The downsizing was just the latest in a broader media and entertainment layoffs as conglomerates rejigger their streaming strategies.

But McCarthy, head of the consolidated Showtime/MTV Entertainment Studios and Paramount Media Networks, rejects the notion that the latest moves represent the end of Showtime.

He’s laid out a strategy for the company to revive and expand its biggest legacy shows into franchises, following the template he pursued with the ever-expanding dominion of “Yellowstone� creator Taylor Sheridan. Spinoffs are in the works for “Billions,� with four series in development (“Millions� and “Trillions� are among the working titles). Also on the way: a “Dexter� prequel and possible spinoffs; and “The Department,� directed by George Clooney (executive producing with Grant Heslov), which Showtime hopes will repeat the success of “Homeland� (a property that Paramount doesn’t own).

The goal is to make Paramount+ (with nearly 56 million subscribers after adding 9.9 million in the latest quarter) more competitive with Netflix, HBO Max and Disney+. The monthly price of Paramount+’s premium tier, which will include Showtime, is increasing to $11.99 from $9.99. But will the strategy that expanded “Yellowstone� — itself a corrective for the decision to license the series to Peacock — work for “Billions?� I asked McCarthy to help make sense of it all.

So Showtime is no longer going to be its own standalone brand — either as a cable channel or on streaming. You guys cut 120 jobs last week. It seems like from the outside that this is a major retreat for Showtime. You clearly disagree with that premise. Why?

Totally. To go back, when we were deciding whether we were going to call the streaming service Paramount+, Showtime or some other name, we did an extensive brand study in 2020. Interestingly, Paramount and Showtime had about 95% and 94% awareness across the country, respectively, which was pretty significant, considering that no more than 25% of the population ever subscribed to Showtime. When we asked what were their top-of-mind shows, four of the top five shows from Showtime were launched before 2013. So I started thinking, what was it about 2013?

Before 2013, there were 20 to 50 premium scripted series, mostly from HBO and Showtime. And they were marketed like theatrical movies. In 2013, there were 75. Also in 2013, streaming reached 50% penetration of cable. From 2013 to today, those 75 shows have grown to almost 460, and you just see this massive clutter of series, most of which don’t get any marketing at all.

The Showtime brand stands for signature shows. Not all of them can be turned into franchises, but many of them have an opportunity to become a world. We had two choices. We could focus on the things that consumers love from us, or we could continue to try to keep going on our own and go bigger and broader. The reality with that is, you just look at the last five years. Showtime launched 23 new series, and of those, only two were hits [“Your Honor� and “Yellowjackets�].

What you’re saying is that, with the explosion of premium programming and streaming, it was hard for Showtime to compete as its own brand, as HBO was going bigger and bigger with “Game of Thrones� and suddenly everyone had their own “Billions� or “House of Cards.�

Also, streaming went from growth to maturity. The big answer to your question is that we’re going into this next phase of streaming where subscriptions on its own are not going to be the driver. It’s really about profitability, retention and delivering for your audience. And in any business cycle, you should start to see consolidation. When you look at our two products, they’re actually incredibly complementary. Six shows accounted for nearly 80% of our downloads and starts but only 20% of amortized costs. But another 20 shows accounted for 80% of expenses and less than 20% of our starts.

We looked at that and said, “Listen, we can lean into the Showtime strengths, and we can build a really significant business and reward those audiences by giving them the content that they expect while far exceeding their expectations, with antiheroes, diverse cultures and powerful, high-stakes worlds.� Or we could keep going broader, and we’d be swimming upstream, because 70% of the audience has said, “Listen, we know who you are, but you’re not for us.�

So instead, we decided to take a much more rewarding and exciting opportunity for that core consumer. But we also recognized that, on its own, that is probably not enough. So Showtime, combined with the Paramount+ series and incredible library, really makes for a rich and rewarding offering. We’re going to deliver the big premium series from Showtime, and we’re going to lean on the Paramount library, the Paramount originals and the Paramount movies to help retain subscribers.

So now you’re doubling down on these legacy shows with “Billions,� for example, branching off into “Billions: Miami,� “Billions: London,� “Millions� and “Trillions.�

And not all of them are gonna make it. We look at it through a filter of it being a world that we can tap into that creates new opportunities. With “Billions,� is it a television series about Wall Street, or is it a global franchise about money, power and corruption? To me, that’s a huge opportunity to tell incredible stories — who’s in power, who’s not, and what would you do to keep it all?

We have four shows in development. I don’t anticipate doing more than two a year, but we need to have a lot of development going on because we need to move quick. It’s a similar model to what we’re doing with “Yellowstone.� We can have the Dutton family be the eyes that we go through, but let’s do the history of the American experience in chapters about how America won the West.

One of the reasons the “Yellowstone�-ification of Paramount+ worked was because you had a singular talent in Taylor Sheridan, who seemed to have this bottomless well of ideas. Do you have someone similar in the “Billions� world?

First, there’s no question that Taylor is exceptional. But you’ll see that more and more series will be with him and somebody else, like we did with “Tulsa King� [created by Sheridan with Terence Winter showrunning]. What we’re doing with Showtime is, we’re partnering with our core creators, like Brian Koppelman and David Levien, who created “Billions� and will oversee the “Billions� universe. But we’ll also look to bring in other creatives to help build out those franchises and ideas.

What you’re doing with “Billions� sounds like the Dick Wolf playbook.

You could look at it as Dick Wolf in broadcast, “Yellowstone� in premium cable or “Top Gun,� “Mission: Impossible� and “Star Wars� in theatrical film. The misconception is that franchises are easier, when in fact they’re a lot harder, because audiences have built-in expectations, you have the confines of what the franchise is, and you have to thread the needle so that it’s good enough to not disappoint the core audience but also create a door for new audiences.

How much are you going to invest in the development of new, premium shows, versus the former era of Showtime? That’s where you get a “Yellowjackets� or a “Shameless.�

It’s going to be a combination. We’ll probably over-index on the franchise [intellectual property]. I don’t want to put hard numbers against it, because it’s really a matter of what comes in. I would do “Yellowjackets.� We’re still taking pitches. Our model is more, “Let’s go to people.� We’re going out to the market and telling people, “Here’s the types of things we would like to do.� We’re definitely going to take a bespoke approach. But it’s going to be one where, with the projects we do get behind, we make sure that we market them and deliver them in the categories with complementary franchise series so they work.

So how much of your job is now hitting the pavement to convince the market that Showtime is still a place where you can take your best stuff?

We’ve been hitting the pavement hard over the last couple months. We actually have a roadshow that we’re doing with Brian Robbins [Paramount Pictures and Nickelodeon] and George Cheeks [CBS] where we’re going to the different agencies to show them what’s different about Paramount+ with Showtime compared to the rest of the market. And there’s very little overlap between them by design.

Paramount+ is mass culture, whereas you’ll really see us lean into diverse cultures on Showtime. “The Chi� is a great example. It’s one of our biggest series, and the show brings in a significant number of subs every year, but 70% of those subs leave within six months, because that’s one of the only shows we have for them. You’ll see us build that lane out so that we’re delivering for that audience year-round. We’ve had 4 million people come in and out, and yet we only count about 100,000 to 200,000 of them on average.

Because the churn rate is so high?

This is the curse of trying to go bigger and broader with Showtime. If you go broader, you can’t satisfy your core audience, so they churn. This strategy is about overdelivering for our core audience and expanding from there. That will dramatically increase our retention. One of our biggest subscription drivers, but also our highest churns, is “The L Word.� I’m a big believer in those audiences, and when we deliver for them, they’ll show up for us. You’ll see us build out our LGBTQ lane as well. We think those audiences will be complementary to Paramount+.

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