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ReelzChannel: Curtain Finally Opens

6/09/2006 8:00 PM Eastern

In 2000, the first X-Men feature film debuted, actor Russell Crowe and director Ridley Scott teamed to create the Oscar-winning Gladiator and Hubbard Media Group announced plans to launch a Hollywood movie-based network called MovieWatch.

Six years later, the last of three X-Men films (The Last Stand) is currently in theaters. Crowe is again collaborating with Scott on a new film (A Good Year), after appearing in two other Oscar-nominated movies.

And Hubbard’s MovieWatch, renamed ReelzChannel, is ready to launch, on Sept. 27.

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Hubbard Media chief Stanley Hubbard last week said he has secured enough distribution to belatedly kick off the planned network, which will provide comprehensive news and information about movies within the theatrical, home video, on-demand, pay TV and basic-cable distribution windows.

ReelzChannel will debut to 28 million subscribers. That Hubbard said was the most ever for a network startup and represents the mass audience the channel needs to secure national advertising revenue.

Hubbard said last week that top cable distributors Time Warner Cable and Comcast Corp. had joined DirecTV Inc., EchoStar Communications Corp.’s Dish Network, Charter Communications Inc., Insight Communications Co. and the National Cable Television Cooperative [NCTC] in agreeing to distribute ReelzChannel as a digital network.

“Our priority has always been to get this network on the air,” Hubbard said. “But it’s taken a little longer that we had anticipated.”

What an understatement.

Since Stanley Hubbard — also chairman and CEO of parent company Hubbard Broadcasting Inc., a St. Paul, Minn.-based firm that owns nine TV stations and several radio outlets — announced plans for MovieWatch in 2000, much has changed. Cable companies have added 19 million digital cable households, according to the National Cable & Telecommunications Association, and 250 new nationally distributed video programming services have been created through 2005, according to the Federal Communications Commission.

The movie business has changed, too. The emergence of Internet-based distribution services from Movielink, CinemaNow and Starz Encore Group’s Vongo — plus mail-order movie-rental services from Blockbuster Inc. and Netflix Inc. — have altered the way consumers view movies.

ReelzChannel officials said the changes work in their favor. Network president of television Rod Perth said movie content consumption is far greater than it was six years ago, making ReelzChannel more valuable to consumers.

“There are 4,000 movies a month that come into a digital home, whether it’s through satellite or cable, let alone all the movies that are being released in theaters and on DVDs,” Perth said. “That didn’t exist six years ago. The timing today is even better than it was when we first announced the network.”

NO OPERATOR FEES

Hubbard would not disclose how much the network will have spent prior to finally flipping the on switch, but people close to the network say the venture will cost Hubbard some $50 million from announcement to launch.

Hubbard predicted, though, the network will break even “inside of two years,” with revenue mostly derived from national advertising.

The network will retain all advertising avail time, and has already signed a number of charter sponsors, although Hubbard would not name any.

To compensate operators, Hubbard said ReelzChannel will provide affiliates with localized, one-minute “What to Watch” interstitials twice an hour that will promote the local system’s upcoming on-demand or pay-TV movie features.

“The interstitials will offer specific recommendations of movies on the system, including what channel and what time the movie is on in that system,” he said.

The network will also overlay local on-demand, pay-per-view and theatrical movie listings over original content aired throughout the day.

“If we’re talking to Leonardo DiCaprio for a movie that’s coming out in theatres, we’ll alert [the viewer] with a lower-third, on-screen reminder that he’s starring in [The Aviator] on VOD right now, complete with the system’s logo,” Perth said. “It’s customized to the viewer no matter where they live.”

Hubbard would not reveal terms of affiliation agreements, but sources close to the network said any operator that distributes the network to more than 20% of its subscriber base will not pay any fees.

Hubbard said operator interest in the product throughout the years kept the company from abandoning the venture.

“If we weren’t making progress [with operators] we would have moved on,” Hubbard said. Distributors such as DirecTV, Insight and the NCTC signed on several years ago despite not knowing when the network would launch. DirecTV had agreed to consider carrying future Hubbard programming ventures when it bought out Hubbard Broadcasting’s U.S. Satellite Broadcasting, a DBS service that had shared satellite space with DirecTV at launch in 1994.

“This is the network that we envisioned six years ago, but it’s much bigger, it’s much stronger and the opportunity is much broader and the distribution is beyond our wildest imagination,” Stanley Hubbard said.

Representatives from Insight, the NCTC and Time Warner could not be reached for comment at press time. EchoStar would not comment. A Comcast spokeswoman said that while the cable company has an affiliation deal with ReelzChannel, “we haven’t announced any launch plans at this time.” DirecTV also confirmed distribution of the channel.

'SPORTSCENTER’ FOR MOVIES

Perth said ReelzChannel content will embrace all aspects of the movie business. While the network is finalizing its lineup, Perth said the signature show would be Dailies, a 30-minute news and information show which Perth describes as SportsCenter for the theatrical category. “It will be topical and it will drill far deeper than other shows that have something to do with movie news,” Perth said.

ReelzChannel also has acquired The Directors, a series about film directors that previously aired on Starz.

Along with the launch of the digital service, ReelzChannel will also create a broadband video service. Still in development, the site will let users track movies through various distribution windows and watch trailers on-demand, Hubbard said.

“We’re always about movies, whether it’s a script that’s been optioned, or a project is in development, or what’s in production now,” said Perth.

Now all that’s left for the long-developing network is to raise its curtains to the consumer.

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