Paramount, Lionsgate, MGM To Roar With New Premium Channel

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Paramount, Lionsgate and Metro-Goldwyn-Mayer, in a move that ultimately will strip Showtime Networks Inc.of theatrical product, are teaming to launch a premium channel next year.

Expected to launch in fall 2009, the entry from the joint venture partners will include their theatricals and archival titles, as well as TV programming, the parties said in a statement Sunday. The channel will also have a video-on-demand component.


The structure of the joint venture -- announced Sunday by Viacom president and CEO Philippe Dauman, Paramount chairman and CEO Brad Grey, MGM chairman and CEO Harry Sloan, and Lionsgate co-chairman and CEO Jon Feltheimer --was not disclosed, but Viacom’s MTV Networks division will provide affiliate and marketing support.


More importantly for Showtime, the decision will at some point early next decade, remove the studios' films from the premium programmer's air. Showtime, which has been investing more heavily in original series development and production in recent years, said it opted not to renew its output deal with Paramount, which ended in 2007, and with MGM and Lionsgate, which concludes this year, because of demands for "outrageous license fees," according to the network's vice president of corporate public relations Stu Zakim.


Zakim said Showtime would use the funds that otherwise have been earmarked for the output pacts to expanded series and marketing initiatives.


Paramount was formerly a sister company to Showtime under Viacom, until CBS Corp., which owns Showtime, was split under president and CEO Les Moonves in 2006.



Among the upcoming theatricals that at some point would air on the new service: Iron Man and GI Joe, as well as classic hits as Paramount’s The Godfather trilogy, MGM's James Bond franchise and Lionsgate's Dirty Dancing.

The JV's channel will join Showtime, Home Box Office and Starz in the battle for premium subscribers and eyeballs. 


Moreover, MGM, which is 20% owned by Comcast Corp., has launched a high-definition channel. The network, which draws from MGM's 4,100 title library, also features such original fare as exclusive behind-the-scenes coverage of red carpet events, sneak peeks at new films in production, seasonal promotions and world premieres of newly re-mastered MGM hits. In addition, it proffers a companion MGM HD VOD platform with other content available at mgmhd.com


It was unclear at press time, how the studio’s titles would be administered between the HD service and the JV service.

"This venture has the potential to be a game changer for the industry," Dauman said in the statement. "We are building an innovative service that will use traditional and new digital distribution technologies to bring great film and television entertainment directly to the consumer."

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