Viacom, Paramount, MGM and Lionsgate made headlines last week when they announced they were banding together to form a new pay TV network. We voiced some questions over the deal, and Rich Greenfield, managing director and media analyst for Pali Research is also skeptical — but Greenfield has a “high level of confidence” there is a fourth “mystery” partner that will be revealed soon. From his report “Paramount, Lionsgate, MGM & Who? Brilliant or Reckless?”(reg. required):
We find it very strange that this fourth “mystery” partner was not part of the original three studio announcement, yet they appear to hold the key to the new network’s distribution and are supposedly going to be responsible for subsidizing hundreds of millions of dollars annually that would normally be paid by consumers (to compensate the studios for their movie output each year).
Greenfield goes on to narrow down possible (and nearly impossible) candidates:
Possible ViaParaLionsMGM Partners:
Netflix: Online distribution is going to be a key component for this new pay network. Netflix coming on board would provide an online streaming system while giving the DVD-by-mail company the opportunity to broaden beyond physical discs. Though we’re not sure how this would fit in with its aggressive moves in the set-top box space.
Google: Though Viacom is suing the search giant for a billion dollars, Google investing a few hundred million in the venture could placate Sumner Redstone. As a bonus, Google would have access to hundreds of movies to help it develop a new search product.
Some Unlikely ViaParaLionsMGM Partners:
Blockbuster: The struggling movie rental company already has its hands full with its attempt to buy Circuit City.
Cable Companies: Comcast probably wouldn’t see enough of a bump in its subscriber base to warrant the investment, and Time Warner is still tied to, well, Time Warner, which is tied to rival pay channel HBO.
Microsoft Xbox: Ballmer is too focused on the Yahoo acquisition right now.
Nearly Impossible ViaParaLionsMGM Partners:
DirecTV: Liberty Entertainment’s control of both the satellite company and pay network Starz rules it out.
Apple: Apple is focused on a la carte downloads and is more interested in selling devices than investing in content.
Greenfield lists other contenders such as Amazon, Sony and Echostar in his full report (check it out for greater detail), and in a call with him this morning, Greenfield said he believes that the mystery company will be revealed in the very near future.