Epix Launches With Big Content But Little Distribution

Viacom and its Paramount studio , Lionsgate and MGM broke off from CBS' Showtime last spring when they couldn't strike new distribution deals, so they decided to launch their own premium movie channel.


Called "Epix," the studios' joint venture debuts today with access to 15,000 films, including movies from MTV Films and Nickelodeon Movies. And Epix plans on airing movies about nine months after they're shown in theaters, earlier than movies usually appear on the likes of HBO and Showtime. But Epix's big library only has small distribution: Epix only current distribution partner is Verizon's FIOS , making it available in just 2.5 million homes.

The big question: can $9.99 per-month Epix compete with its current limited distribution? Showtime, which is in 17 million U.S. households used to provide $100 million in revenue to Paramount. With such small distribution Epix certainly can't generate near that kind of revenue for Paramount or its other owners.

This morning I interviewed Epix President Mark Greenberg who says that this kind of slow start isn't uncommon for new cable channels.

He also noted the rumors Epix is close to a distribution deal with Dish Network which reaches more than 13 million households.

Epix is making a big push behind its Web site —EpixHD.com— which it's offering free access to for the next three days. Epix is making more than 3,000 titles available online through its "Epix Megaplex." Epix is really trying to "distribute" its content to the web, password-protected for its subscribers of course, just like it is through your cable box.

The concept makes sense: consumers are demanding access to their content anytime, anywhere, the same idea embraced by Comcast's "On Demand Online," and the "TV Everywhere concept Time Warner's CEO Jeff Bewkes is pushing. The question is whether that online access will attract more subscribers or generate incremental revenue.

The marketplace for premium movies is far more crowded than it's ever been. Not only are there a number of premium cable channels — Showtime, HBO and Starz — but now there are a ton of other ways to get movies on demand. Netflix and Amazon's UnBox stream movies on demand right to your television. And then there's the Video-on-Demand that Time Warner Cable and Comcast offer. With consumer spending still tight, we'll see if Epix provides enough value to attract a critical mass of subscribers. It'll be interesting to see if free access to the website this weekend attracts any subscribers who can't get Epix on their TV.

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