Upfront Central

Upfronts 2013: FX to Create Suite of Three Channels

FXX launches with comedies and aims at younger viewers 3/28/2013 10:24:00 AM Eastern

Complete
Coverage: Upfronts 2013

Updated 1:50 p.m. ET

FX Networks announced that it will launch a new network,
FXX, on Sept. 2 that will form a suite of three channels along with movie
channel FXM, and is planning to program them with an ambitious slate of 25
original series, an amount on par with the major broadcast networks.

At an upfront presentation for advertisers, John Landgraf,
president of FX Networks, said the three channels will carry the FX brand and
personality. Regardless of genre, "you know an FX original when you see it,"
Landgraf said.

As
expected,
FXX will aim at younger views in the 18 to 34 year-old
demographic. Some of FX's current comedies, including It's Always Sunny in Philadelphia, The League and Legit, and
its late-night block will
move to the new channel,
but the plan is to develop original scripted drama
for the network as well. The network will launch in more than 74 million homes,
with many of those coming from the former Fox Soccer Channel. FX is planning to
develop and produce original miniseries and limited series, particularly for
FXM, which will focus on 25 to 54 year-old adults. FX will aim at the heart of
the 18 to 49 year-old adult demo.

Landgraf talked about some of the dramas and comedies in
development, saying those were just the tip of the iceberg. "The quality of the
FX programming lineup is going to improve," he said.

FX is currently the cable network with the most reach in all
of cable entertainment, according to Lou LaTorre, president of ad sales for the
Fox Cable Entertainment Group. "We feel quite confident FX will continue to grow
as FXX launches as a brand," LaTorre said. "We'll be in a very strong position
heading into this upfront with these complementary brands."

Bruce Lefkowitz, executive VP of ad sales, said that FXX had
already signed up four charter clients during the calendar upfront in which
advertisers buy ad time based on a January-December schedule. Three of those
four clients bought commercials on all three FX networks, with the fourth
aiming at only the youngest demographic.

All of the networks will sit on a foundation of a large
amount of acquired series and theatrical movies that FX has been acquiring in
preparation for its expansion. Many of those movies will be available to create
substantial VOD offerings for cable operators and will not be available to
streaming VOD distributors such as Netflix or Amazon, bolstering the value of
the current pay TV environment and discouraging cord cutting.

The FX suite will also include a digital product called FX
Now that will include an app and expanded access to on-demand content for
authenticated subscribers, said Lefkowitz. Original program will be available
on demand the morning after it airs. FX's Movie Bin will offer forty movies a
month on demand.

FX Now will help monetize online and on demand viewing and
create new ad opportunities. Within the three-day C3 TV window, programs on FX
Now will carry the same commercial load and viewing will be added to the
commercial ratings used to measure ad buys. That viewing will be included in
the network's ratings estimates, as well as its post-air analysis. After the
three-day window, FX will run just 10 commercials per hour in shows run on
demand. Ads on these VOD views will be sold using dynamic ad insertion. As much
as 10% of them will count toward the number of impressions an advertiser buys
from FX, Lefkowitz said.

Ad buyers said they were impressed by the presentation.

"The more vehicles we have to reach young viewers, the
better," said Francois Lee, senior VP at MediaVest. "I always applaud when
someone tries something different," Lee said. With the big names developing
programs for the networks, "they are on a growth path."

"They seem to be doing all the right things," added Gary
Carr, senior VP, executive director of national broadcast at Targetcast.
"They're trying to capture all of the digital viewing. That's the future." 

When FX launched TheShield, it ushered in a new era of
high-quality programs on basic cable for viewers and advertisers.  Back then, FX asked media buyers, "If you
could buy HBO for your clients, would you?" Now, with its turbocharged video on-demand
offering, he asked the buyers, "If you could buy Amazon Prime or Netflix, would
you?"

FX will launch a new brand campaign, using the theme
"Fearless" to capture the kind of edgy adult programming it has stood
for since launching The
Shield
a decade ago.

Landgraf said FX has picked up new seasons of series
including Justified,
Sons of Anarchy,
It's Always Sunny in
Philadelphia
, The
League
and Legit.
The late-night show Totally
Biased
will expand to five nights a week.

It also showed advertisers new series coming from creative
talent including Ang Lee, the Coen Brothers, Guillermo del Toro, Alexander
Payne, Sam Mendes and Paul Giamatti.

Last
month, parent company News Corp. also announced plans to turn cable channel
Speed into a national cable sports brand with Fox Sports 1.

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