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Struggling VH1 Seeks New Tune

Thanks in part to Snooki taking her talents to South Beach, MTV greatly overshadowed sister network VH1 in 2010. Which was a good thing for VH1. That’s because while Jersey Shore made MTV hip again, VH1 was having a worst year ever, suffering through three quarters of sharp ratings declines to end up off 31% in both total viewers and adults 18 to 49. It got to the point where Viacom rarely mentioned the network in presentations.

But ad buyers have noticed. “It’s a challenging time for them right now,” says Francois Lee, VP/activation director at MediaVest. And on Wall Street, where slow growth of Viacom’s domestic ad revenue has been a concern, Michael Nathanson of Nomura Securities estimates VH1’s problems resulted in a 2% hit to the company’s ad revenue this year.

The situation could have been very different: Jersey Shore was originally developed by VH1, but wiser heads decided MTV had more need for the show.

VH1 has had ups and downs before. President Tom Calderone thinks the network is ready to rebound, as it did when it aired Behind the Music, or I Love the ’80s, or The Surreal Life. “The channel has always reinvented itself every five years or so,” Calderone says.

With the success of Surreal Life, VH1 aired a gaggle of dating-competition shows populated by dubious characters. Ratings were great, but it led to tragedy in 2009 when a contestant on Megan Wants a Millionaire was charged with killing his model wife. The show was canceled, along with I Love Money 3.

Calderone says VH1 was already looking to diversify its mix, but the Megan incident prompted a “soul-searching moment…how can we move on from these competition dating shows and be more diverse in our storytelling.”

Critics say the network became timid. Calderone confi rms “we shelved some shows that came out of that same voice,” and that too many times lots were filled with therapy shows as VH1 started a new round of development.

The ratings plunge wasn’t a surprise. “When you are taking a network and shifting it into a new direction, there’s going to be bumps in the road. Internally, everybody knew this was going to happen,” Calderone says.

Many executives who helped VH1’s ratings soar left before the ratings tanked, including Brian Graden, president of MTV Networks Entertainment, and former VH1 program chief Michael Hirschorn, once dubbed “Mr. Bad Taste” in a newspaper story.

But Calderone notes that Jeff Olde, the current executive VP for programming and production, remains from the good times, providing continuity. VH1 also had been getting dozens of shows under a deal with 51 Minds, creator of Megan, Flavor of Love and Rock of Love. After reevaluating that relationship, Calderone notes VH1 gets its shows from a wider circle of producers these days. The network also lost its head of ad sales as MTV Networks restructured the department.

Calderone says he sees signs VH1 is coming back. With the returns of Basketball Wives, Brandy and RayJ: A Family Business and Celebrity Rehab, ratings turned up in the last weeks of the fourth quarter compared to the beginning of the quarter.

There are new shows in the pipeline, including Mob Wives from Harvey Weinstein and Ben Silverman; an Audrina Partridge project produced by Mark Burnett; and Saddle Ranch, set in the Sunset Strip bar, produced by Bunim Murray.

VH1 is also jumping into scripted fare with Single Ladies from Queen Latifah. A movie and the series are both set to premiere next July.

While analyst Nathanson is expecting a rebranding effort from the network, Calderone says it only needs “tweaks.” Audience research shows people are still checking out VH1, but coming up with a new slogan would be hard. “Certainly music, pop culture and storytelling are the tenets of what we do, but I don’t think that makes a great bumper sticker,” Calderone says. “If we keep to those beats while always being original, we’ll be in good shape.”

Wall Street and Madison Avenue will be watching. “Sometimes programming doesn’t work out,” says Media- Vest’s Lee.”As long as they work with us to deliver the deal, and look for a solution, we have some tolerance. After knocking off 30%, hopefully there’s no way to go but up.”

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Jon Lafayette
Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.