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Viacom is betting television viewers still aren’t getting their fill of movies, and plans to launch a movie channel in a head-on attack on CBS Corp.’s Showtime.
The new network, set to launch in the fourth quarter of 2009, will have the exclusive pay-TV rights to titles from Paramount Pictures, Metro-Goldwyn-Mayer and Lionsgate, writes Mediaweek.
Viacom CEO Philippe Dauman claims the venture could be a “game changer” for the industry - he mentioned that a video-on-demand service will be available to affiliates as a complement to the linear channel. Beyond that, he didn’t say exactly how the network will change the industry.
The channel and on-demand service will pit two companies controlled by Sumner Redstone against each other, Bloomberg points out.
Viacom, currently a primary content provider for Showtime, may begin sending its films to the new network, according to Stanford Group Co. analyst Fred Moran. It could also use the new channel to ask higher prices from Showtime. Moran said that pay TV is a natural extension for Viacom.
As for Paramount, the new channel could probably pay Paramount more for its films than Showtime would be willing to pay, Bear Stearns Cos. analyst Spencer Wang said in a report today.
CBS’s Showtime had been engaged in lengthy discussions to renew theatrical-output deals with Paramount, MGM and Lionsgate, according to Deadline Hollywood Daily, which reports that one insider said the Viacom channel “royally screws” Les Moonves. “I don’t think Les ever believed that we would form our own channel. Certainly we never discussed it,” another insider is quoted as saying. “But then it became clear that the numbers on an economic basis makes more sense for us to own the channel and have equity. We would rather control our own destiny. So we turned a negative into a positive.”
Deadline Hollywood Daily’s Nikki Finke claims that word from inside Viacom is that it is still unclear whether the channel will be pay TV or basic cable.
The full press release from Viacom is available here.
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