How is it determined which premium movie service, Starz…HBO et al, gets the movie once it comes off PPV?
IIRC, the networks bid on the rights.
But the movies are shown commercial free. How does the service make back the money on the bid?
Get first run of enough big movies and you will attract millions of paying subscribers, like Starz does. Others, like HBO and Showtime, attract their customers with quality original productions coupled with a reasonable amount of first run premieres.
Subscriptions. If a service (eg. HBO) consistantly gets the most popular movies, it will (theoretically) draw customers away from the competitor (eg. Showtime) who want to see such movies.
Blanket contracts with the studios, for the most part. I think popular movies are sometimes sold to whoever will pay the most though.
Here is one breakdown I saw, don’t know if it’s still accurate:
HBO: Fox, Paramount, Warner Brothers, Columbia, and DreamWorks
Showtime: United Artists, Tristar, and MGM
Starz: Universal, Hollywood Pictures, Miramax, Touchtone, New Line, and Disney
That sounds right to me, though I have no idea why. I may or may not have heard something similar from a different source. Still, it sounds reasonable.
Not to sidetrack the OP too much, I have a followup question:
How long do the exclusivity agreements last? At least once a month I’ll notice a channel I don’t subscribe to has a premier of a movie I want to see. That Mel Gibson Vietnam War movie was a Showtime premiere, for example. It premiered last year. How long must I wait for the contract to run out so I can see it on HBO or Starz?