Viacom - MGM - Lionsgate

Joint Venture

EPIX

January 28, 2009 - Viacom, MGM and Lions Gate have created a movie channel to be debuted on the Web in May as the consortium battles to score key distribution deals on cable and satellite television.

The joint venture, called Epix, signals that the studios are forging ahead with the venture despite the tough economy.

The new network, which will compete with premium channels such as HBO and Showtime, was born after failed negotiations last year with Showtime.

Mark Greenberg, chief executive of the joint venture, said that the proposed channel will feature more than 15,000 new and old movies from the three studios, and eventually add original TV series, including a pilot episode to air soon after the channel's official October launch.

Lions Gate CEO Jon Feltheimer said an original series being readied for Epix had been pitched to HBO. He likened it to HBO's "The Sopranos" and Showtime's "The Tudors," with comedic elements and set around the music world.

The venture still lacks a key ingredient: agreements with pay-TV providers, such as cable or satellite companies. Discussions with distributors were progressing, "some better than others," Mr. Greenberg said. "There's always some issue about prices."

The network plans a May launch of a subscription-only broadband site that would allow Internet users to stream its content online, Mr. Greenberg said. But he added that a direct-to-consumer service is "not our primary business model."

"I think that's an indication they're having a hard time," Deana Myers, a senior analyst for SNL Kagan, said of the decision to launch broadband first. "It's a tough environment."