Inside a giant tent at New York’s Lincoln Center in May, Phil Robertson strolls onstage. He’s wearing camouflage pants, wraparound sunglasses, and a solid-black long-sleeve shirt that accentuates his signature beard, which is off-white, unruly, and of ZZ Top proportions. Before him are a multitude of linen-draped tables, where media buyers from advertising companies sip wine, nibble on plantain chips, and listen to yet another pitch on how they should spend their clients’ budgets. This is advertising “upfront” season in New York, and Robertson, a cast member on A+E Networks’ runaway blockbuster reality program Duck Dynasty, is one of the stars of tonight’s show. Duck Dynasty, which features a charismatic family in West Monroe, La., that runs a multimillion-dollar duck-hunting equipment business, is the biggest hit series ever for A+E Networks. While relentlessly mocking each other, the Robertsons drive pickup trucks through backcountry roads and dive headlong into screwball adventures, guns blazing. At the end of each episode, the family gathers around a table for supper, says a prayer, and offers a sweet spoonful of country wisdom. The final episode of the show’s third season, which aired on the A&E channel on April 24, was watched by 9.6 million viewers, according to Nielsen (NLSN), beating everything on both cable and broadcast television that night in the 18- to 49-year-old demographic, including the NBA playoffs and Fox’s American Idol.
With cameras flashing, Robertson makes his way to the front of the stage and hands a camo sports jacket to Mel Berning, A+E Networks’ head of ad sales. Berning sheds his conservative gray jacket and pulls it on. “Mel, that’s what I’m talking about,” Robertson says. “What do you think, folks?”
Upfront season is a festive, testy time of year when every TV network (and, these days, a handful of businesses with large, online video operations such as YouTube (GOOG) and Yahoo! (YHOO)) throws a lavish self-congratulatory party, rolls out its programming lineup for the coming season, and tries to sell ad space in advance. This past season, the proliferation of choices for consumers took a major toll on the traditional broadcast networks, which collectively lost a sizable portion of their viewing audience. “The math says that broadcast erosion is throwing over a billion dollars up for grabs in this year’s upfront,” Berning tells the ad buyers. “If you’re tired of paying a failure tax, we have lots of successful programs for you to invest in.”
It’s a sales pitch that’s been working for A+E Networks, a private New York company owned by Hearst and Disney (DIS) that operates a portfolio of cable channels, including History, Lifetime, and A&E. (A+E is the name of the company; A&E is the name of the channel.) According to data from SNL Kagan, ad revenue at A&E grew from $366 million in 2008 to $477 million in 2012. During that same period, ad revenue at History grew from $310 million to $499 million. A+E Networks generates roughly $1.2 billion of profit on $3.6 billion of annual revenue, according to a network source who was not authorized to speak publicly about the company’s finances.
Toward the end of A+E’s presentation, the network brings out its closer. As a soaring, triumphant anthem blares, Nancy Dubuc, the company’s new chief executive officer—and, as of late, the show picker with the hottest hand in cable television—struts onstage. “Everyone always talks about the elephant in the room,” says Dubuc, who’s been with the company for 14 years. “But tonight we’re going to talk about the ducks. Our ducks. They are quacking, and the competition is quaking.”
Dubuc, 44, is the third CEO in the company’s 29-year history. When it comes to defining her programming tastes, she doesn’t like to be pigeonholed. She’s willing to try anything that might succeed or fail—as long as it’s likely to succeed or fail spectacularly. A big, arresting story or character, she says, wins over any genre, formula, or format. “I don’t tend to ghettoize the shows,” she said in an interview shortly after her promotion in April, before the upfronts. “A great character or a great story is always going to trump a generalization.”
Dubuc, who radiates confidence, looks right at home on the red carpet alongside the TV talent. It wasn’t always so, she says. She’s worked hard in recent years to remake herself into a convincing headliner. “Sometimes the leaders of entertainment companies are under additional scrutiny to entertain,” she says. “That isn’t something that necessarily comes naturally to me. It’s a part of my job to get good at it.”
Dubuc grew up far offstage in Bristol, R.I., a town of 23,000 on the Atlantic coast. Her mom ran a catering business. Her stepfather is a lawyer. Throughout high school and college, Dubuc worked after school, on weekends, and during summer breaks at her mom’s business. “It was part disciplinarian action and part work ethic,” Dubuc says.
In college at Boston University, Dubuc rowed crew and majored in communications. She had a short attention span and didn’t enjoy class. The thought of attending graduate school was stifling. “If I wasn’t really enjoying getting through high school and college, I certainly wasn’t going to enjoy going through law school or medical school or business school,” she says. “That wiped out a lot of options.”
After college, Dubuc got a series of video-producing jobs in Boston at the Christian Science Monitor, WGBH-TV, and Discover Magazine, a documentary TV series about science. In 1999 she joined A+E Networks as the director of historical programming at History. At the time, the channel was only a few years old and its programming could be summarized in two words: Adolf Hitler. At History, Dubuc helped develop a quiz show, an animated series, and a documentary hosted by movie star Dwayne Johnson, aka The Rock. Dubuc moved to A&E, History’s sibling channel, in 2003.
A&E started in 1984 as a highbrow channel filled with earnest coverage of the arts. “Back when I first got my cable package in the early 1980s, you’d turn on A&E and there would be operas and ballets and Shakespeare film festivals,” says Robert Thompson, director of Syracuse University’s Bleier Center for Television and Popular Culture. When Dubuc joined A&E, it had just lost its contract to air repeats of Law & Order, which left lots of airtime to fill. Dubuc and her colleagues experimented with reality television, scouring the fringes of American culture for memorable characters who could take viewers into unfamiliar worlds. Along the way, A&E forged a new identity with the help of successful shows about an ex-con, born-again Christian bounty hunter in Hawaii (Dog the Bounty Hunter), the family of a mafia boss (Growing Up Gotti), and the lives of substance abusers going through rehab (Intervention).
While on maternity leave in 2007, Dubuc got a call from her mentor, Abbe Raven, then-CEO of A+E Networks. Raven asked Dubuc to return to History to run the channel. Turning around a struggling cable brand takes a willingness to experiment and a capacity to survive public flops and inevitable criticism. “Nancy is willing to take chances,” Raven says. “You either have that or you don’t.”
Dubuc says her fearlessness is a result of the years she’d spent at A+E, where executives could take programming risks without worrying about losing their jobs if a new series tanked. It was timidity, she says, that was frowned upon. It helps, Dubuc says, that A+E Networks is a private company. Unlike many of their competitors, A+E executives don’t have analysts looking over their shoulders every quarter. “Our programmers and the marketers don’t find themselves scrambling every 90 days to adjust or redefine their strategies,” she says. “We are an industry with an average rate of success of 50 percent at best. When you can do that in a protected environment, you can get a lot of creative risk taking.”
She also credits the company’s owners, Hearst and Disney, which have a history of successful partnerships, including ESPN, owned 20 percent by Hearst. (Last year, the two bought out Comcast’s (CMCSA) 15.8 percent stake in A+E Networks for $3 billion in a deal that valued the company at $19.2 billion.) “The executives that work with us on both sides have been connected to these brands for a long time,” Dubuc says. “It makes the whole thing pretty easy to navigate.”
Dubuc, who oversees an annual programming and marketing budget that tops $1 billion, says that A+E Networks’ owners are supportive and largely hands-off. “These are brilliant executives with a lot of challenges on their plates,” she says. “If there’s an opportunity to not worry about a big chunk of their business, they’re going to take it.”
Rejoining History in 2007, Dubuc found a dispirited team. “The programming group told me that we were a brand which couldn’t have a hit series,” Dubuc recalls. “They also said we couldn’t do original programming in the summer because History guys aren’t watching TV in the summer. I said, ‘Well, we can’t just go black!’ ”
She explored anything that showed quantifiable evidence of connecting with viewers. For years, History had aired an anthology series called Modern Marvels, each episode of which went behind the scenes of some aspect of contemporary life. Over the years, an episode that focused on the hazardous job of driving trucks over Canadian frozen lakes always did surprisingly well. Dubuc suspected that something about the milieu captivated people’s imaginations.
She called Thom Beers, the producer of several reality shows, including Discovery’s Deadliest Catch, about fishing boats in the Bering Sea, to ask if he would shoot a pilot. “I picked up the phone and said, ‘You have 30 days to go see if men driving trucks 15 miles an hour is interesting,” Dubuc recalls. “He said, ‘It’s not.’ I said, ‘Well, you’re doing it anyway.’ ”
Ice Road Truckers, which made its debut in 2007, became a hit, leading to six more seasons. In the meantime, History has green-lighted more nonhistorical reality shows, such as Ax Men and Only in America With Larry the Cable Guy.
“Take a look at the Duck Dynasty guys,” says Bill Koenigsberg, CEO of Horizon Media, an agency that handles A+E Networks’ marketing promotions. “Take a look at the guys from Pawn Stars. Middle America can relate to these people.”
History is now experimenting with full-length scripted series: This year it premiered its first, Vikings, in which Nordic hero-farmer-boatmen battle with British autocrats during the eighth century. The network recently picked up a second season.
Michael Hirst, the creator of Vikings, says people warned him that Dubuc could be intimidating. At 5-foot-11, with the self-assured swagger of a former collegiate athlete, Dubuc literally looks down in pitch meetings at the hopeful screenwriters, directors, and show runners whose ideas she often rejects. Hirst says he discovered a decisive executive who had firsthand experience as a producer and knew the value of putting trust in the show.
Despite its lack of live sports programming, over the past 12 months, History has ranked as the No. 2-rated cable network among adult male viewers, trailing only ESPN. According to data from Brad Adgate, senior vice president at Horizon Media, about 60 percent of History viewers are men.
“Think back to when it was mostly World War II documentaries and that type of content,” says Gibbs Haljun, a managing director at MEC, a media-buying agency. “They’ve really pushed the envelope and brought in a broader audience.” Rob Bochicchio, chief media investment officer at ID Media, says History, A&E, and Lifetime are all strong at connecting with adult viewers, 25 to 54 years old. History’s audience tends to be more heavily male. Lifetime skews female. A&E is down the middle. All of the channels, he says, offer an efficiently priced way to reach large audiences in a safe, predictable setting. Unlike many cable channels, there’s not a lot of edgy, disturbing series on A+E Networks, which is just fine with ad buyers.
Bochicchio says a number of his clients, including American Express (AXP), Nationwide Mutual Insurance, Merck (MRK), and Match.com (IACI), all advertise on A+E Networks. “You’re talking about insurance, financial, pharmaceutical, and dating—four very different top-tier, blue-chip categories all playing into those networks,” he says. “They offer quality, family-friendly programming you don’t mind your product being associated with. That’s a big deal.”
Dubuc brushes off the critique: “At the end of the day we’re not an education resource. We’re an entertainment brand.”
True to her risk-taking philosophy, Dubuc has racked up some high-profile mishaps. In 2011, History planned to run a fictional miniseries about the Kennedys, starring Greg Kinnear as JFK and Katie Holmes as Jackie. Before the series could air, several prominent liberal activists and historians attacked it as inaccurate and unfair. In the face of the mounting pressure, A+E Networks decided to nix the series. (It appeared later on ReelzChannel, an independent cable channel with narrow distribution.)
Dubuc says the experience has not made her gun-shy about investing in potentially explosive projects. Last year she approved the casting of Lindsay Lohan in a Lifetime movie about Elizabeth Taylor. The resulting biopic, Liz & Dick, generated lots of tabloid fodder but only modest ratings. “Everyone in media has controversies,” Dubuc says. “No one is immune to it. You don’t ever deliberately set out to step into that kind of situation. But sometimes you take a calculated risk.”
Lifetime is one of Dubuc’s more pressing challenges. In 2009, Disney and Hearst merged A+E Networks with Lifetime—a cable network aimed at female audiences. According to SNL Kagan, advertising revenue at Lifetime dipped from $633 million in 2008 to $505 million in 2012. To win back ad dollars, Dubuc will need to find a way to generate big hits with women, the way History has with men. At the upfront in May, Dubuc revealed that the company has picked up a pilot by Marc Cherry, the creator of Desperate Housewives, for a scripted series called Devious Maids, about four Latina housekeepers working for the rich and powerful in Beverly Hills. Next season, Lifetime will air a big-budget miniseries, Bonnie & Clyde, which will be simulcast on History and A&E.
Dubuc is also managing the rebranding and expansion of A+E’s handful of second-tier cable channels, which include H2 (historical documentaries), LMN (movies for women), and Bio (biographical programming). “I want to see us referred to as a six-network portfolio,” she says.
Dubuc will have to grapple with the disruption that’s reshuffling the entire television industry. A small but growing number of U.S. consumers have decided that rather than pay, say, $100 a month for a cable or satellite package, they will instead cobble together their home entertainment from a variety of sources that stream video over the Internet, such as Netflix (NFLX), Hulu, YouTube, and Aereo.
At the moment, such “cord cutters” are a niche community. But executives at cable content companies—which make a significant part of their revenue from subscription fees paid by cable and satellite distributors—only have to look at the newspaper and music industries to see how fast the changing patterns of media consumption can lay waste to a once-profitable business model.
“I can’t control the changes that are happening in technology and distribution,” Dubuc says. “I can control what we make.”
One way A+E Networks can better prepare for the changes, she says, it to own more of its content outright. For years the company has owned the majority of its reality shows, which are cheap to finance and produce. Scripted series and movies, on the other hand, are much more expensive. As a result, cable channels such as A&E have traditionally paid for only a portion of the development costs in exchange for a limited set of the show’s rights. With new ways of distributing video popping up every day, owning the limited rights on a series feels increasingly like a losing proposition. Next season, A&E will air a scripted drama called Those Who Kill, starring Chloë Sevigny as a detective who chases down serial killers. A+E Networks is co-producing and co-owning the series with Fox 21, a division of News Corp. (NWS) “You can’t necessarily offer all of your product in different places if you don’t own all the rights,” Dubuc says. “You’re seeing a lot of strain on that old model. It doesn’t make as much sense anymore. I might as well just pick up the full freight and monetize the back end the way a studio would.”
These days, A+E fills a lot of airtime by continuously running marathons of its series, such as Duck Dynasty, which keeps programming costs down and also reels in channel surfers, getting them hooked on a show. To date, A+E Networks has commissioned 41 original one-hour episodes of Duck Dynasty. It gets a lot of mileage out of that investment. Between Jan. 1 and May 12, according to Nielsen, A&E used its Duck Dynasty library to fill 644 hours of airtime.
“If we’re talking about the short term, they are well-positioned,” says Syracuse’s Thompson. “What a cable channel needs is a couple of big hits that get people to know what number it is on their dial. They watch the big hits, and they see promos for other shows. That’s what gets you going. … If we go beyond five years, though, it is so impossible to predict.”
The conventional wisdom in the film world is that movies with a focus on American history don’t play well overseas. Dubuc says A+E Networks is generating more than $100 million a year in overseas revenue, and the category is growing at a fast clip. “Ice Road Truckers is History’s No. 1 show internationally,” Dubuc says. “The History stuff, in general, has traveled well abroad because there is a real action and adventure element to a lot of it.”
Even so, the bulk of the company’s business remains dependent on strong ratings in the domestic market. The success of A&E and History will continue to rely on Dubuc’s ability to tap into the cultural zeitgeist of the American heartland.
The subject matter, Dubuc says, landed perfectly in History’s sweet spot. “We once did a Bible documentary series hosted by Charlton Heston,” Dubuc says. “The Bible as a topic has always been a very good core player for us.”
In May, theblaze.com, a website founded by conservative pundit Glenn Beck, reported that there was a rumor circulating on social media networks that A+E executives asked the Robertsons to tone down references to religion and guns on Duck Dynasty. Reached on the phone during a break from filming in June, Duck Dynasty star (and Phil’s son) Willie Robertson says he never received any such directive from A+E. The network, he says, has been supportive and unobtrusive. “Nancy and A+E have really let us go and find where the show needed to be,” Robertson says. “It was going to be impossible to separate our spirituality and our faith from the show.”
Robertson says that since the show made its debut a year and a half ago, he’s been surprised by the fan base: It’s not just evangelicals or people living in rural areas. Robertson says that when he travels he’s always approached by viewers from a range of social, economic, and racial backgrounds. He says the series has succeeded for many of the same reasons that The Cosby Show turned into a giant hit in the ’80s: It’s funny without being mean-spirited, has strong family values, and depicts a functional household in a setting that’s underexposed on TV.
“With a lot of the humor in television, all the writers are doing the same type of thing,” Robertson says. “You got to get out of Hollywood a little bit. You come down here to the South, you get a different, unique way to look at life.”
