Blog Post

Movielink Redux: Five Studios Form PayTV and VOD Venture; Launch in Fall 2009

Among the strangest ways to announce a venture with big political ramifications across the entertainment industry: on Sunday morning. Viacom (NYSE: VIA) and its Paramount Pictures unit, MGM Studios, and Lionsgate have formed a JV that will launch a premium TV channel and VOD service in the fall of 2009. This will combine the new and classic feature film output and original TV series of five studios, the release says. The five studios in the deal are Paramount, Paramount Vantage, MGM, United Artists and Lionsgate.

— The venture is unnamed…it is expected to name a CEO soon…the person has been selected but not yet named.
— No equity stakes disclosed, though it seems Viacom is the lead on it.
— The new venture will have access to Paramount and Paramount Vantage titles released theatrically on or after January 1, 2008.
— Access to MGM, United Artists and Lionsgate titles released theatrically on or after January 1, 2009.
— Exclusive access during the pay television window to new movies Iron Man, Star Trek, Pink Panther 2, Cloverfield, The Curious Case of Benjamin Button, and others.
— Will have access to motion picture titles spanning the libraries of the five studios.
— Will feature new original TV series created by the five studios.
— Viacom will provide operational support, including marketing and affiliate services through its MTV Networks division.
— Viacom CEO Philippe Dauman: “Will use traditional and new digital distribution technologies to bring great film and television entertainment directly to the consumer.”
— Will certainly rattle the premium TV triad of HBO, Showtime and Starz. As THR points out, this is bad news for CBS’s (NYSE: CBS) premium channel arm Showtime. It has output deals with Lionsgate, MGM and Paramount that are set to expire and won’t be renewed given that the venture’s exclusive access deal.
— CBS CEO Leslie Moonves was understood to be briefed on the venture plans Sunday, says the THR story. “Where’s the brotherly love, yo?”, he may have said to Dauman (my stellar guess).
— When CBS recently announced the launch of its CBS Films unit, a Paramount competitor, Sumner Redstone said both the companies should pursue their own strategies.
— Dauman, in an interview to LAT, called the opportunity “unique” because the output of other major studios is contractually tied up for years to come.
— The four men began talking about a possible venture several weeks ago, the LAT story says; the plan gelled quickly and was finalized in meetings last week at Viacom’s HQs in NYC.
— More details from DHD: Not decided if the new premium TV channel will be pay or basic cable. It says Viacom/Paramount has a huge equity position in the new channel; and no upfront cash is changing hands.

More details on how it will operate or distribute were not released. Also not clear: if there will be major online component to it, besides the Pay TV/VOD component. More details in the release.

Staci adds: The new service will take advantage of online distribution, Dauman told me in an interview: “We