CBS - NEW MOVIE CHANNEL A NEGOTIATING PLOY?

Some analysts were wondering aloud Monday whether Viacom is serious about launching a premium movie channel with MGM and Lionsgate or whether the announcement that it planned to do so was really a ploy to induce CBS's Showtime to pay more for the three companies' product. The Hollywood Reporter quoted one source as saying that if it was all just a negotiating tactic, it would be "hard to back off" if Showtime remained adamant. Nevertheless, it would appear that the three studios have not discussed their plan with major cable outlets, many of which are implementing their own plans to launch movies-on-demand services. The Wall Street Journal quoted a source close to Comcast, the country's leading cable-TV provider, as saying that it has "little interest" in carrying the new channel, even though it owns 20 percent of MGM. Moreover, Showtime doesn't have much of an incentive to sweeten its deal with the three studios, the WSJ observed, noting that of its top 20 telecasts in 2007, only two were theatrical movies. David Joyce, an analyst with Miller Tabak & Co., told Fortune magazine, "In the past six or seven years, movies on Showtime have seen as much as an 80 percent decline in viewers." Fortune also observed that CBS would be able to use the $300 million it currently pays for the three studios' movies each year to produce its own films -- not only for the channel but for theatrical release as well.

22/04/2008