Viacom Takes the Lead in Planning a New Pay TV Channel

A couple years back, Sumner Redstone’s National Amusements split Viacom (parent company of Paramount Pictures) from CBS.  Now it looks like Viacom and CBS will compete in one more area.

Kenneth LiMon reports for Reuters/Nielsen.

Sumner Redstone’s Viacom Inc will launch a premium TV and movie channel with Lionsgate and Metro-Goldwyn-Mayer, aiming a direct volley at Time Warner Inc’s HBO as well as Redstone’s own Showtime networks owned by CBS Corp.

The new channel will have originally produced television series, as well as feature upcoming movies like “Iron Man” and “GI Joe” and classic hits such as MGM’s “James Bond” franchise and Lionsgate’s “Dirty Dancing.” It is expected to launch in autumn 2009, the companies said in a statement on Sunday.

The venture, in which Viacom will take a lead role and own the biggest stake, is viewed as a challenge to CBS, which controls the Showtime Networks Inc premium movie and TV cable channels. Showtime currently holds contracts to show movies from MGM and Lionsgate.

Will this have an impact on ABC or any Disney-owned cable channels?  Or on films released by the Disney Company?  Time will tell.

Films and shows from Paramount, MGM and Lionsgate will be made available to the new channel and services on an exclusive basis during the pay television period, with some exceptions.

Paramount’s contract with director Steven Spielberg for “Indiana Jones and the Kingdom of the Crystal Skull” requires the film to be made available to the highest bidder for television, for instance.

Showtime dismissed the threat of the new competition. As movies now are often sold on Apple’s iTunes online store or on video-on-demand months before reaching pay TV, it is original programming such as HBO’s popular series “The Sopranos” that attracts the biggest audiences.

Average household ratings for theatrical films have declined 80 percent since 2001 at Showtime, according to Nielsen ratings.

“We’ve made no secret of the fact that we’ve felt for some time that the value of these feature films has been declining,” Showtime Chairman Matt Blank said in a phone interview.

There are so many ways to access feature films and television shows now.

Since CBS’s split from Viacom, the two companies have drifted into each other’s businesses with Redstone’s blessing. CBS, for instance, has launched a small film studio to develop smaller budget films, a move that could help it save on costs to acquire films to air on Showtime.

Hey, maybe there will be a new job for Michael Eisner?

With more than a year before its launch, details, such as management and what types of new digital services will accompany the channel are being worked out. The parties will announce a new chief executive for the venture shortly.

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About Ken Pellman

I was a Disneyland Cast Member for 15 years. Currently a freelance writer.
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