Showtime Not Sweating New Premium Channel Entry

Programmer Said It Elected Not To Renew 'Outrageous' Paramount, MGM, Lionsgate Output Deals

By Mike Reynolds -- Multichannel News, 4/20/2008 5:18:00 PM

Showtime Networks Inc. insists it’s not concerned by the formation of a new premium channel, a joint venture of Paramount, MGM and Lionsgate.

The network, slated to launch in 2009, will include theatricals from those studios, which are Showtime output suppliers.

Showtime vice president of corporate public relations Stu Zakim said the premium programmer made the call not to renew the output deals with Paramount, MGM and Lionsgate.

“They were asking for outrageous license fees. The landscape has changed dramatically since the last time these deals were negotiated,” he said. “Movies, which go from the theater, to the airplane, to download on the computer, to DVD, are not as important to our business model as they once were.”

He underlined the point by noting that only two theatricals ranked among the 20 highest-rated programs on the network in 2007.

Zakim said Showtime feels it’s better off investing the monies that would have been allocated to securing output renewals into more series development and marketing initiatives.

The network has been raising its profile in the critical community through such series as Weeds, The Tudors, Californication, Brotherhood and Dexter, among others.

Moreover, Zakim said films from the aforementioned studios will continue to air on Showtime for several more years. He explained that with Paramount’s output contract concluding in 2007 and Lionsgate and MGM’s expiring at year-end, the typical 18-month period between the close of the theatrical window and a film’s premium debut would keep fresh titles from the trio on Showtime into 2010-11. He also said films from that group that have already run on Showtime will return after a two-year period, after playing through other windows.

Still, the loss of the titles – Showtime’s only output deal at this juncture is with stablemate CBS Films, which is in the theatrical development stage, but has yet to green-light its first motion picture into production --  has to hurt down the road, right?  

“We think we’re in a better position as a free agent,” Zakim maintained. “There are plenty of independent films out there that are more moderately priced. This is a better financial situation for us.”