emily: he has backed them of tvs biggest hits. elr, arrested development. then, he joined showtime and has led the resurgence in original showed programming. >> what we do has consequences. now, the executive has a chair at the top. joining me today on studio 1.0, showtime's new ceo, david nevins.

thank you so much for joining us today. great to have you. david: thank you for coming. emily: so, billions. what was it about this showed that made you think it could be a hit? david: it hasn't been explored so much on television. it touches all of our feelings about wealth and class, which is a hard subject in america. so this is very much a zeitgeist and it deals with all of our complicated issues with the super wealthy. emily: you launched homeland and when it comes to spotting a hit, is it all art? david: there is not a ton of science. first of all, it is some combination of who are you betting on? statistics about people, instincts about creators and the

actors who will be able to grow and create a rule. good writing is at the core of it all. it is a good script that it's a good actor which gets a good director which makes for a compelling show. and it has some sense for feeling where the culture is right now. what people will sit up and take notice with, which is ever-changing. emily: is it a good thing? has there been times where people have said -- david: we don't really do testing in any way. emily: really? that is kind of scary. you are taking a huge risk. david: it is 80 people, there is nothing scientific about it. i like to watch our pilots in different groups of people over and over. i learned that from ron howard. movieuld always watch his with different people. and i remember the first time he

showed it to me and i tried to be polite and say it was great, he would let me get away with that. he wanted to really know what i thought and where it liked, where things were confusing. so you do this over time. you develop a feel. emily: you have recently taken over for mass blank, who was in this seat for many decades. he had this job longer than any other executive in television. and now you are on the business side. david: this is the rare orderly transition in this business. it is carefully planned over the course of the last two years. matt has been the architect of it. he has been great of it. he is now the chairman and i came up through the creative side, then the business side was very motivating. , itecome ceo at this moment

is a really exciting time to do it. we are now selling ourselves over the internet. there is a whole new way, we have a direct relationship with our customers. television has reached the top of the totem pole in terms of its place in the cultural hierarchy. emily: is this the golden age of tv? david: i think so. it is a reused term but how can you say it is not? television gets the highbrow conversation, the highbrow thaticism and critiquing you just couldn't do when it was not locked. what: usc parodies of hbo, distinguishes showtime from hbo or netflix? david: we are all doing very

similar things. for better or for worse, the premium, high end area is where everybody wants to go. so what distinguishes a showtime show? i wanted to be culturally relevant. homeland has things to say about america's place in the 21st century world. even masters of sex has a lot to and conjugatedr relationships with sexuality. so, cultural relevance, entertainment value, characters with complicated, adult psychology. emily: some would say that you have all of these hit shows but you haven't had your major, major hit. what is going to be your game of thrones? david: i don't think you ever plan for the big hit. we didn't know what homeland was going to be. we are delivering consistent shows that people want to watch.

i would love to have a game of thrones. emily: does it keep you up at night? david: no. no. we have a lot of shows. know, we try to figure ke you to make each one bigger than it is right now. emily: how do you view something like hbo? are they your nemesis? david: no. amazon, fx, netflix, hulu launching shows now. one million and people are trying to get in the game. generally, what is good for hbo is good for showtime. centurycomplicated 21st

media world with a lot of people clamoring for attention and we have to stay at the top of the list and continue putting out shows that feel like they have messages that will make people pay attention. even in the traditional universe, we are still only in 23,000,000-24,000,000 homes. almost three quarters of the homes in america don't have showtime. we have a lot of room. it is a moment of great opportunity. emily: how disruptive has netflix been to your business? david: they have seemingly unlimited amounts of money, that is a challenge to compete with. they buy our programming. so they are a customer. they buyer programs internationally. emily: have you ever considered throwing all of the episodes out there at once? david: there is great value in

having the conversation sustained over the course of a couple months. so i think the world is going to come back to a little more measured. although different shows have different ways. when we put twin peaks out, we thought it would be fun to do it in a different way. that is something i will talk about with david lynch. there are all sorts of possibilities. out,the idea of throwing it having a week of buzz or two weeks of does, i don't think that makes sense for us. emily: how me people are paying for showtime? david: i will sell you, it has grown every week since we have launched. well more than doubled since homeland and it has gone up again since then. emily: how many more seasons

does homeland have left? david: well, it reboots itself every year. it is a new story and a new place. it is changeability and it works really well. i don't feel like we are at -- i don't know, exactly. but i feel like, three. emily: three more seasons of homeland? it is really claire danes, they will make a decision when she is sick of doing the show or playing that character. when they are sick of writing that show. do you think the story of america's conjugated place in the 21st century won't be 2022?nt in 2015, 2019 and of course it will be relevant. this just a question of how long we keep going. emily: what has it been like working with david lynch?

david: he is an incredibly efficient director. he is david: he is an incredibly efficient director. he is now more than halfway through. h like working with david lynch? david: he is an incredibly efficient director. he is now more than halfway through. he is kind of a genius. watching him work, i have been down to the set couple of times. the actors, i'm not allowed to say who they are, but many of them have worked with him for their entire careers. so it is really watching a maestro. i am incredibly excited. dare i say, genius? i don't use that word often. emily: a work of genius? david: i should not on wood but i feel like it will be really special. emily: what about china? this is a question that netflix is being asked all the time? ♪

emily: there are more scripted tv shows than ever before. there are also more canceled tv shows than ever before. are we in a tv bubble? david: a bubble implies that there will be a puncture and we will be down 25%. i definitely do not see that. it is possible to not succeed. microsoft, yahoo!, they went in and they went out. they decided after a certain

amount of investment, it is not for us. there will be other people and there will be shows that fail. that said, it is robust. the demand is there and the desire is there. we are in expansion mode and i don't feel like we have too much. if you ask a showtime subscriber, they wouldn't say that. they would say, give me another show. emily: is it scary that amazon subscriber, they wouldn't say that. they would say, give me another show. emily: is it scary that amazon can make a hit original show? david: anyone can make a show. whether it is a hit or not, we don't know until we know how to people are watching. emily: like transparent. we don't homage people are watching. david: it is a terrific show. i personally love transparent. and mock scary resizing. think it is good for the creative process and for the

business. it keeps us on our toes. we have to compete harder and better and make this a creative home for creative people. what i like to keep up the competition? i don't really have that instinct. i don't look at the world that way. we will shut the door behind us and no one else can come in this club -- i don't think that is good for storytelling or creativity. for the consumer, it is not. emily: what about international expansion. i know you made a deal in canada. do you want to sell showtime streaming? in other countries? david: it has been a big push that we have been making, that i have been making. we have more shows that work in the u k and france, compared to some of our competition. we made a big push starting in canada.

then we did u.k., sky. italy, we just did australia. continental europe. the showtime brand is starting to mean something. so rather than selling our shows in a one-off way, billions is over here and dexter is over there -- we put them all together, same network and it makes a big difference. it is a factor of five and 10 times what were making. he ability tobout t sell streaming service independently? david: we haven't done it yet. there is such interest in premium programming right now that we made a decision in the big territories to sell. but we will see what happens. emily: what about china?

this is a question that netflix is being asked all the time? david: go figure, i think billions has a real potential in china. there are conversations going on and i'm hopeful that billions gets a real deal in china that will be potentially the biggest deal ever. in china. china is becoming a real market for us. as recently as when we were selling ray donovan, we sold it in there for pennies and now, there is a real real interest. it is the first major sale we have made in china. it is significant. emily: can you win the world without china? can netflix dominate without china? david: china has always been a terrible market for american television. heresy is rampant. you know, the movie studios figured out how to do stuff in china five years ago. now they are making real money

and i expect there to be a lot of growth they're in the next five years. and i think we have spent a lot of time talking about china. emily: what about apple? what do you think is apples future in television? ♪

emily: how did you get to hollywood? david: i just drove here. emily: in a volkswagen beetle? david: in an oldsmobile. my grandmother's oldsmobile. i came out soon after college. it was actually when i was in scotland. i found a bunch of hard-core film geeks who would have given their right arm to move to hollywood and i realized, i have no immigration problems. i'm american and has an american passport. i can just drive there. and i did. i wanted to be in the movie business. it worked out well. the turn between the 1980's-19 90's, that was not the golden age of television. now, there is no place i would rather be. emily: you worked your way out.

you have worked with ron howard, i am curioust fox, about network television in particular. since parenthood ended, and i know you were behind parenthood and friday night lights, i don't watch a single show on network television, except for the bachelor. which i am embarrassed to admit. embarrassed.be i love reality television. emily: what are your favorite reality tv shows? david: master chef, project runway, i was watching real housewives for a while. but then it made me feel bad about my masculinity. so i stopped. emily: it takes a real man to admit watching real housewives. what is wrong with network television? david: network television still gets big audiences. there are -- you can now, what

five or sevenide years ago, before people had really developed with pay cable and when there was a volume of premium shows, you can now satisfy yourself living over with mad men and homeland and billions and silicon valley. you don't have to leave that neighborhood. but there are a lot of people who are very satisfied with the neighborhood that is the big bang theory, chicago fire, blackish -- interesting stuff. the networks are starting to innovate more. out of necessity. emily: should the cable companies be worried? david: they are under pressure to innovate. they are under pressure to wayge the way people -- the

they make things available. and the way people are able to watch them. broadband, that is where the growth is coming from. emily: what about espn? david: espn is suffering right now, the law of egg numbers. incrediblyill an healthy cash machine and they are trying to recalibrate growth. emily: what about apple? what do you think is apple's future in television? david: if you had asked me a year ago or nine months ago, i would have thought that they would be having tried to figure out their own version of a bundle. emily: what happened? why didn't it work out? david: i think it is challenging

to put the pieces together with the content owners. there were a lot of conversations going on about how and when. but apple is an incredibly innovative company and they make products that people want. there is enormous potential to crack the television world open. emily: in tv, could they end up being just a set top box? david: i think that is possible. they could also be a tv or a box next to the tv, there are a lot of different ways. emily: have you heard about -- david: the fight over the living room has not been set up yet. i don't think that has been decided yet. tv is a huge part of who controls the living room. who controls the electronics in the house? emily: what about the

entertainment industry in general? where is it in five years? what are you watching? to seeyou will continue the blurring between movies and television. ,ou will see television shows stuff produced primarily for television that will play in theaters. occasionally, and out of home collective experience. i'm already feeling interest and people are coming to us with this. when twin peaks is out, people will want to put that in theaters. so i see those lines blurring. but fundamentally, the movement is for bigger screens in your home. and that has been television's greatest strength. so the desire for great,, located storytelling, the narrative ability to process constipated narratives, it is only growing exponentially. shows a getting more complicated and more sophisticated. it rewards good writing and good

acting. i expect that to only increase in the next five years. thely: david nevins, ceo of showtime network. thank you so much. david: thank you. emily: and for admitting that you watch the bachelor. david: it was never my favorite. ♪

carol: welcome to "bloomberg businessweek." reinventing the ge. >> defending your from online defamation. carol: let's go meet the editor. ♪ carol: we are here with the editor of "bloomberg businessweek," ellen pollock. you write about a capital mystery. meaning capital expenditure. ellen: we look at why companies are investing less in software tools, the percentage of total investment on an annual basis is down.