Nancy Dubuc may have 99 problems, but DirecTV ain't one.
After making her entrance to a cover version of Jay-Z's thumping 2004 anthem, the president and CEO of A&E Networks on Thursday night deftly sidestepped the Shane Smith-sized elephant in the room with an upfront pitch that celebrated the company's mission to develop "memorable and unique content."
While Ms. Dubuc didn't have anything to say about Vice's impending takeover of the H2 network --having already secured carriage deals with five of the top operators, AETN is still working to get satellite giant DirecTV to sign off on the re-brand -- Mr. Smith, the Vice CEO, was spotted among the horde of buyers and clients who packed New York's Park Avenue Armory for the event. The Vice logo was also splashed across the walls of the venue.
Both sides are expected to reach an agreement before the end of the month.
If Vice accounted for much of the pre-show buzz, Ms. Dubuc adroitly yanked the focus back to developments across her core brands: A&E, Lifetime and History. As homegrown content has become a necessity -- the real money's in the back end -- Ms. Dubuc's new A&E Studios arm now has some 40 projects in production.
"Content is at the heart of everything we do," she said. "We aren't afraid to take creative risks, which is the main ingredient in our recipe for change."
Much of the AETN upfront pitch zeroed in on upcoming scripted projects, including an epic adaptation of Leo Tolstoy's "War and Peace" and Will Packer and Levar Burton's reboot of ABC's eight-part 1977 blockbuster, "Roots." Both event series will be simulcast across the three flagship networks, repeating the tactic the group first used to bolster audiences for "Bonnie & Clyde" in 2013.
In keeping with A&E's embrace of genre exercises like "Bates Motel" and "The Returned," the network is taking a turn for the Satanic with "Damien." An extension of "The Omen" trilogy, "Damien" is written and produced by Glen Mazzara, late of "The Walking Dead."
Other series in the hopper are Lifetime's "Unreal," which stars a Dubuc-esque Constance Zimmer as a hard-charging, take-zero-in-the-way-of-shit-from-anyone TV exec, and History's Vietnam War drama "Boys of '67."
In a nod to the vertiginously evolving media space, Ms. Dubuc pledged that AETN would "continue to lead during these transformative times." As was the case with every top-tier cable network in 2014 (ESPN being the notable exception), the three AETN nets took their lumps in prime time. Per Nielsen, History's calendar-year deliveries of adults 18-49 dropped 19%, while A&E plunged 34% and Lifetime fell 10%.
While the core AETN brands are among cable's biggest draws (all three are ranked in the top 15 with viewers in the dollar demo), H2 is more of a sidecar network. That said, the Vice takeover would appear to be a license to print money. With a subscriber base north of 70 million households, H2 boasts more than twice the reach of HBO (31.4 million), and the younger, hipper audience Vice is likely to attract can only translate into huge upside on the ad sales front.
At present, H2 traffics mostly in insurance (Geico, Progressive and State Farm are particularly well-represented on the channel) plus telco and financial services. The Vice brand would likely age down the net at a rapid clip, transforming H2's target demo from adults 25-54 to the 18-49 set, which in turn could prove a draw for advertisers who buy time on younger-skewing outlets like FXX, Comedy Central and Adult Swim.
While AETN is said to be negotiating a new carriage fee for Vice, the H2 base rate is so low (7 cents per subscriber per month, according to SNL Kagan estimates), that even a 100% hike would still fall well shy of the industry average ($0.28).