AFI BLOG: Media and Technology

The Wall Street Journal

Cable and satellite-TV operators gave an icy reception to plans by three movie companies for the launch of a new pay-television channel next year, indicating that the new channel may have a tough time angling its way into homes.

Viacom Inc.’s Paramount Pictures, Metro-Goldwyn-Mayer Studios Inc. and Lions Gate Entertainment Corp. Sunday announced plans to start their own premium TV channel, in hopes of reaping monthly subscriber fees. The move came instead of renewing their lucrative movie-supply deals with CBS Corp.’s Showtime Networks, after Showtime proposed cutting the fees it currently pays the studios.

But the cable and satellite-TV companies that would have to carry the new channel aren’t convinced the world needs another movie-centric service, according to executives at several companies. Even Comcast Corp., which owns 20% of MGM, has little interest in carrying a new movie channel, according to a person close to that company.

“Movies are not as much a part of the mix” with the growth of video-on-demand, says Michael Willner, chief executive of Insight Communications Co., a cable operator primarily in the Midwest. “If they are just another outlet for movies they will have a tough go.”

For their part, people close to the three movie companies say they are launching more than a movie channel: The companies intend to create original TV series. The studios also plan to use their movies and TV shows more flexibly than existing channels, using the Internet, video-on-demand and other platforms. They are close to announcing deals that will make their distribution strategy more clear.

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