Five movie studios in historic VOD, cable joint venture

Paramount Pictures, MGM, and Lionsgate have formed a joint venture that will plan to distribute a premium television channel as well as a video-on-demand service.

The group project could fundamentally change the current status of premium cable television, where a third-party would sign deals to distribute content through its network rather than the studios directly.

Here, the studios would "control their own destiny," as one official put it. Since the channel would be owned partially by the content creators themselves, the middleman would be taken out.


Initially five studios have come aboard to support the network: Paramount, Paramount Vantage, MGM, United Artists, and Lionsgate. It has not been named, nor has a CEO been appointed. An announcement is expected soon.

The channel should launch in the fall of 2009, the joint venture said in a Sunday press briefing. Additionally, it would have exclusive access to certain movies, as well as original television series content created by the studios.

It is not immediately clear how this deal would affect pre-standing agreements signed with the traditional premium networks such as HBO, Starz, and Showtime. Additionally, whatever online component the service will have as that has not been completely planned out, apparently.

In an interview with PaidContent, Viacom CEO Philippe Dauman (parent company of Paramount Pictures) said he likes the deal because "it is a game changer in a category that has been done the same way for a long, long time."

Viacom's stake in Paramount makes it the lead shareholder, although MGM and Lionsgate own substantial equity investments. MGM's current major stakeholders include Sony and Comcast. Viacom was at one time the parent company of Showtime, though that property sided with CBS Corp. as a result of its recent split. Whether the new channel will be premium a la HBO or a basic or premium cable channel is not being disclosed.

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