Epix pay channel to show Samuel Goldwyn films

[August 06, 2009]  LOS ANGELES (AP) -- Epix, the fledgling pay TV channel being launched in October by Paramount Pictures, Lionsgate and MGM Studios, took a step closer to legitimacy by signing its first deal with a movie production company outside its ownership group.

The deal, to be announced Thursday, will give it exclusive rights to distribute up to 20 movies made by privately held Samuel Goldwyn Films, some nine months after their theatrical release in 2010 and 2011.

One film slated to be part of the package is "The Yellow Handkerchief," a love story starring William Hurt and "Twilight" star Kristen Stewart.

The lineup of independent fare will bolster the films from its three movie studio owners, whose movies together account for about a quarter of the box office revenues reaped by major Hollywood studios. The studio owners have distributed such blockbusters as "Iron Man" and the latest "Indiana Jones" in theaters and DVDs, and those movies will be exclusive to Epix among pay TV operators.

It follows the announcement last week that Epix had signed its first carriage deal with Verizon Communications Inc.'s FiOS network, which has 2.5 million customers.

The film output deal also marked a snub to CBS Corp., which was interested in adding the Goldwyn films to its Showtime channel.

The studios decided last May to stop sending their movies to Showtime, which had paid them $300 million per year for the right to show them on pay TV, but was trying to negotiate a drastic cut in fees.

Instead, they partnered in a $150 million startup that promised to show their movies on TV and simultaneously on the Internet on an Epix-branded site, a beta version of which launched in May. The Web site will be restricted to Epix subscribers when it debuts.

Paramount parent Viacom Inc. owns 42 percent of the venture, while Lionsgate owner Lions Gate Entertainment Corp. and Metro-Goldwyn-Mayer Inc. each own 28.6 percent.

Epix CEO Mark Greenberg said the deal helps demonstrate the channel's goal to have a variety of content along with original series, comedy specials and extras such as footage from set visits that are generally saved for special features on DVDs.

He said talks were ongoing with other independent moviemakers and that there would be "at least one more (output) deal done before the launch" on Oct. 1.

Talks with other cable, satellite and telecoms companies to distribute the channel are also in the works, Greenberg said. "A couple of months before you launch is when a lot of these deals come together."

Epix will have to cut those deals before its invested capital runs out. In the first half of the year, it already paid Paramount $61 million for the rights to its movies, even though it has yet to launch the channel. Greenberg expects Epix to break even on an operational basis 18 months after launch.

Samuel Goldwyn Films' president and co-founder, Meyer Gottlieb, said he was confident the channel would succeed.

"It's a bit of a startup situation and that's always a place where we like to get involved," Gottlieb said. "We have total confidence that they're going to launch and be very successful and we'll be successful alongside them."

[Associated Press; By RYAN NAKASHIMA]

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