By David Poland poland@moviecitynews.com
When Divorce Goes Wrong
We in the media jump like trained monkeys when studios and others offer up press releases. Yippee! It’s NEWS!
But a lot of the time… really, more than 20% of the time… the story fades as the players decide not to play. And very rarely is there a course correction since no one releases a story that their initiative failed and few journalists take any of this too seriously… until there is another press release.
So…
The Weinstein Co has announced its re-pacting with Showtime… at the expected lower price (the Hollywood Reporter reporting on TWC paying Showtime upfront cash makes little logical sense… there may be smoke and there may be money changing hands, but why and how and how much probably has not yet been uncovered)… which is most likely exactly what Paramount and MGM and Lionsgate will end up doing also.
With The Weinsteins out… MGM building with Mary Parent, but unlikely to be delivering much product to anyone before product that would have been running on Showtime will need someplace to land… Lionsgate having a rough run and 13 films on the schedule for the rest of this year, which means a lot of cash out in marketing and few guarantees of big hits… and Paramount already in flux with the anticipated DreamWorks exit in the months to come and not able to promise more than a half dozen films to a new outlet for cable release in 2009…
It’s independence vs. security. And with all three major players weak… well…
Meanwhile, just a breath after Philippe Dauman was saying about the decision not to renew the Showtime deal, “We wanted to control our destiny,” Paramount has done a deal with Jaman for digital delivery of its product:
JAMAN.COM AND PARAMOUNT DIGITAL ENTERTAINMENT ANNOUNCE ONLINE DEAL
The Kite Runner, There Will Be Blood, Into the Wild, Cloverfield and many popular titles to Jaman’s online library
San Mateo, Calif.- July 15, 2008 – Jaman.com, a leading global community and online destination for quality entertainment, today announced the completion of a distribution deal with Paramount Digital Entertainment. Many popular movies from Paramount Pictures will be available for rental or purchase from Jaman’s site to viewers across the nation.
Jaman’s expansion of its library continues to connect people with movies they love with the convenience of the Internet.
“Jaman is proud to deliver the latest hits and classics from Paramount Pictures,” said Gaurav Dhillon, founder and CEO of Jaman. “The addition of these wonderful Paramount titles is a big stride towards our goal of making Jaman the biggest online destination for quality film.”
“By bringing our titles to Jaman, we hope to engage new audiences with great movies,” said Malik Ducard, Vice President of North America Digital Distribution, Paramount Digital Entertainment. “Jaman’s creation of a secure, high-quality platform was a big draw for us as we strive to make our films easily accessible to audiences around the world.”
Nice control.
Paramount has also made deals, beyond its direct control, for digital distribution of clips and shows from its cable nets with Joost. Why does Paramount need two separate digital distribution channels to deliver content from the wide range of content creators? (shrug)
Paramount continues to fight itself, leasing out assets that the company should be keeping for itself. And how long can Sumner Redstone allow Viacom division Paramount to compete with Viacom division CBS, which owns Showtime? They are now on the way to having – and more importantly, paying for – competing pay-cable networks and competing movie divisions… INSANE.
The three major movie pay-channels are:
HBO – Established in 1972 – Deals with DreamWorks, Fox, Warner, Universal
Showtime – Established in 1976 – Expired Deals with movies still in the 2008 pipeline from Paramount, MGM, Lionsgate
Starz/Encore – Established in 1994 – Deals with Disney, Sony, Overture
So, no new major pay movie nets in almost 15 years. As you can see, Disney and Sony have the comfy position of dominating Starz/Encore and are in excellent position to someday split the two sides of the company into individuated networks. WB obviously has natural family dibs on HBO, but the ratings at the first pay-TV major still make being there attractive for Universal (which has flipped around a bit), Fox, and DreamWorks. Don’t be surprised if the next major pay-tv net is Universal/DreamWorks, splitting off of HBO at some point.
What there is not is a financial incentive to sell outside of the family ahead of selling inside the family anymore. On individual movies, yes. On overall deals, no. And the cost of launching a stand-alone net in future will become less of an issue as niche branding becomes increasingly the norm. Paramount is five years ahead of itself – as the dominant element in their attempt to launch a new net – and too weak to force the issue.
How can Paramount fail to return to the Showtime fold before January 1? There needs to be some kind of realistic outlet in place by then. Is Redstone really going to let this go on past then? Because right now, there is no network to put on the books. And while the 2008 number for pay-cable lease of the average studio movie may be under $10 million, it’s another $120 million – $160 million that a studio can count on. And after Paramount has left much of that on the table because of the DreamWorks deal – yet another hidden cost – rebuilding, which is exactly what’s about to happen, can use every base of support possible.
Moreover, the Weinstein deal, whatever the terms, speaks to the state of the content-creator business at the moment, as does their deal to move Project Runway to ABC’s Lifetime network from NBC Universal’s Bravo. The issue of the moment is survival. And as The Weinsteins spread out over Disney and Viacom’s CBS (spurning Viacom’s Paramount), while still seeking a distribution partner – likely a third corporation – for the future, the opportunity to hold out for your own place on the dial is not an option unless you are very, very deep pocketed.
And right now, very few outlets are.