SHOWTIME NETWORKS INC. is opening an in-house agency as part of ambitious plans to intensify advertising and marketing efforts for its pay cable television channels.
The agency is named Red Group, after the signature color of a brand identity campaign being introduced for Showtime, the largest Showtime Networks service. Plans call for spending $40 million next year on the campaign, which will carry the assertive theme ''No limits.''
Though the campaign's outlook is limitless, the same cannot be said for the overcrowded realm of pay or premium cable networks, described recently by Business Week magazine as ''a backwater of the entertainment world.'' Growth, once robust, has slowed significantly as consumers gravitate to other ways to watch movies at home like videotapes and pay-per-view television.
Worse yet, the bigger rival that has bedeviled Showtime Networks for decades, the Home Box Office unit of Time Warner Inc., is gaining momentum for its flagship HBO channel with award-winning original programming. Paul Kagan Associates, which tracks the cable television industry, estimates that as of June, HBO and a sibling, Cinemax, had 33.2 million subscribers compared with 17.1 million for the three pay networks owned by Showtime Networks: Showtime, the Movie Channel and Flix.
Not surprisingly, executives at Showtime Networks are optimistic that they can indeed put the ''Show'' back in Showtime.
''There's a new, revitalized Showtime we're trying to get consumers to understand,'' said Len Fogge, executive vice president for creative and marketing services at Showtime Networks, a unit of Viacom Inc. in New York.
Like HBO, Showtime in 1998 will emphasize original programs: more than 30 films, series like ''Stargate SG-1'' and ''The Outer Limits'' and 4 mini-series.
''It used to be that premium services were just about theatrical movies,'' Mr. Fogge said. ''Now it's become so competitive, it also has to be about the original programming you put on.''
Mr. Fogge is heading Red Group and its 75 employees; he had served as president of Grey Entertainment, a unit of Grey Advertising, and Franklin Spier Inc. before joining Showtime Networks in April 1996. Red Group will develop, create and produce all television, radio and print advertising for the three Showtime Networks services as well as the Sundance Channel, which the company operates and manages.
Red Group will also manage media buying for the networks along with the New York office of Young & Rubicam Advertising. That agency was one of nine considered by Showtime Networks, Mr. Fogge said, before ''our in-house group got together and asked to pitch the account.''
''They came back with winning concepts that blew me away,'' he added, ''and won the account.''
Those concepts were centered on the ''No limits'' theme, which Mr. Fogge said is meant to appeal to two types of viewers most likely to subscribe to pay networks.
He described one type as ''enthusiasts, who love everything about television.'' The other, he added, are known as ''thrill seekers, who are looking for high-voltage excitement'' that often takes the form of action-adventure programs.
'' 'No limits' says we offer stimulating, exciting experiences for thrill seekers,'' Mr. Fogge said, like ''Stargate SG-1'' and boxing.
''And it says we push the boundaries of what you get on traditional TV,'' he added, citing a coming mini-series, a sequel to ''Tales of the City'' that was rejected by PBS after conservative groups complained.
A central element of the campaign is a redesigned logo for Showtime that emphasizes the letters ''Sho'' by placing them inside a circle, which Mr. Fogge said was intended to evoke a spotlight.
'' 'Sho' is how we're listed in guides across the country,'' he added, referring to TV listings that often abbreviate a network's name to three or four letters.
Showtime is the most recent pay cable network to send its logo spinning in circles. The Movie Channel began displaying the letters ''TMC'' inside spheres in March. Six months later, Cinemax brought out a redesigned logo with the letters ''max'' inside a circle.
And for the first time in 25 years, HBO has changed the identification commercials between programs, making the letters ''HBO'' the stars of brief action or comedy vignettes. Those spots supplement the brand identity campaign created for HBO by the BBDO New York unit of Omnicom Group.
Asked why the pay cable leader was making changes, Eric Kessler, senior vice president for marketing at HBO and Cinemax in New York, replied: ''The television environment continues to be very competitive. You have to keep your pedal to the metal.''
TZ, a division of National Video Center/Recording Studio Inc. in New York, created the HBO identifications. Hatmaker, a design company in Watertown, Mass., created the new Cinemax look.
The Showtime campaign features a 60-second commercial with surreal imagery, which will run on broadcast networks like CBS and NBC; syndicated programs like ''Entertainment Tonight,'' and cable networks like Comedy Central and E! Entertainment Television.
There will also be print advertisements in consumer magazines like Entertainment Weekly, Jet, Premiere, TV Guide and Vanity Fair and trade publications like Cable World and Multichannel News. Other media planned for the campaign include radio, posters, direct mail and telemarketing.