Sony signs Pay-1 output deal with Netflix, Starz joins Showtime without a Pay-1 deal for a major

Discussion in 'Internet Streaming Services' started by techguy88, Apr 9, 2021.

  1. techguy88

    techguy88 Well-Known Member

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    Sony recently announced starting with their 2022 theatrical releases their Pay-1 window, traditionally held by Starz, will now go to Netflix.

    Meanwhile NBCUniversal is now considering taking Universal's Pay-1 window from HBO (which includes HBO Max & Cinemax) for Peacock when that expires with the 2021 slate of films.

    However their original stance was to simply take back the Pay-2 window for Peacock and keep licensing out the shorter but more lucrative Pay-1 window so who knows what NBCU/Comcast decides. Disney already stated it plans on taking 20th Century Studios Pay-1 window back for Disney+ and Hulu after the current deal with HBO expires.

    However given Sony's recent news this means out of the traditional 4 premium television services only 2 will have Pay-1 output deals with a major studio in 2022. That being HBO via its sister studio Warner Bros. and Epix (ironically) with Paramount.
    • Starz will take over the Pay-1 window of Lionsgate films starting with 2022 theatrical releases. However Lionsgate is often regarded as a "mini-major".
    • Showtime meanwhile is dependent on small independent studios for Pay-1 deals.
    • In preparation for the launch of Paramount+, ViacomCBS renegotiated their Pay-1 deal with Epix which included a 1-year extension to cover 2023.
      • This allows ViacomCBS to send some of Paramount's films to Paramount+ first after 45 days in theaters.
      • Some films will follow traditional windows and premiere on Epix's Pay-1 window.
      • After a small period of exclusivity both Epix and Paramount+ will share the remainder of the Pay-1 window.
        • MGM's own films will follow this release pattern.
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    Starz is really going to have to ramp up their production of originals if Lionsgate wants to compete in the streaming realm.
     
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  2. NashGuy

    NashGuy Well-Known Member

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    Nice chart. There are a couple of additional wrinkles to the info you have documented here. The first is that Epix has, for years now, shared their pay-1 window for theatrical films with larger streaming services, first Netflix and then Prime Video and Hulu. The Netflix deal ran from 2010 to 2015. The deals with Amazon and Hulu began in 2012 and 2015, respectively, and appear to still be going, at least for films released through 2020. Ninety days after new films debut on Epix, they become available on both Prime Video and Hulu.

    Given that Epix now has a deal in place with Paramount+ for the two services to share the pay-1 window on films released in 2021-23 from both of Epix's supplier studios, Paramount and MGM, I'm not sure if Epix's deals with Amazon and Hulu are still going for films released this year. I've never seen any end dates mentioned for the Epix deals with Amazon or Hulu.

    The second thing I'd point out is that Lionsgate has a subsidiary studio called Summit, which has its own separate output deal in place with HBO that covers theatrical releases through the end of 2022. So while films released under the Lionsgate banner starting in 2022 will indeed switch to Starz for their subsequent pay-1 window, that won't be true for Summit releases until the start of 2023.

    I'm not sure how much the upcoming changes will hurt Starz. Their flow of recent pay-1 theatrical films has been pretty meager for awhile now since it has relied solely on Sony. Soon it will rely solely on Lionsgate.

    I find it a little odd that ViacomCBS is positioning their fledgling Paramount+ service as a competitor to their far larger and more established premium service Showtime as a destination for theatrical films. Instead of recent Paramount and MGM films (shared with Epix) going to Showtime, they'll be going to Paramount+.

    I continue to think that it would make sense for the Paramount, Lionsgate and MGM studios, along with their associated services Paramount+, Showtime, Starz and Epix, to end up together under one corporate parent, with Showtime, Starz and Epix combined to form a single premium cable/streaming service focused on adults with more sophisticated tastes while Paramount+ would be the streaming-era successor to basic broadcast and cable TV, with stuff for all ages, including kids, and more mainstream tastes. Perhaps the pay-1 window for those studios' films could be shared between Paramount+ and an enlarged Showtime (after absorbing Starz and Epix). Some films (more adult/indie/prestige-skewing) would debut on Showtime and then be shared with Paramount+ after a certain amount of time (e.g. 90 days) while other films (more mainstream and G/PG-rated) would debut on Paramount+ and then also become available on Showtime later.

    As the cable bundle continues to erode, it will hurt Showtime, Starz and Epix, all of which have traditionally relied on MVPD distribution as optional add-ons to the basic cable bundle (and/or inclusion in upper-tier basic bundles). As the landscape increasingly shifts to a la carte SVOD services, I'm skeptical that all three can successfully compete and survive, not just against each other, but also the much larger Netflix, Prime Video, Hulu, and HBO Max, which all compete, to some extent, for the same types of viewers, but which offer much more content per dollar cost than do Showtime, Starz or Epix at $11, $9 and $6 per month, respectively. None of the three are niche services, catering to very specific tastes (like, say, Acorn TV or Shudder), but they're also not big broad services like Netflix or Hulu either. They're caught in the middle, which is generally not a good place to be.
     
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  3. boukengreen

    boukengreen Legend

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    What is pay-1 and pay-2 windows
     
  4. NashGuy

    NashGuy Well-Known Member

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    The pay-1 window is the first time period during which a theatrical movie is available from a subscription video service, such as HBO Max, Netflix, Showtime, Disney+, Starz, etc. The pay-1 window usually begins anywhere from 7 to 10 months after a movie first debuts in theaters. After it leaves theaters, it will become available for purchase and rental through VOD outlets (e.g. iTunes, Vudu, Comcast, Amazon, etc.), then shortly thereafter available on Bluray and DVD. And then after that, the movie enters its pay-1 window with whichever service(s) has a contract in place with its studio.

    The pay-2 window simply follows the pay-1 window. For example, a few years back, films from The Weinstein Company had an exclusive pay-1 window on Showtime, where they would air and stream for several months and then they would leave Showtime and shift to their pay-2 window on Netflix. So maybe one of their movies debuted in US theaters in Nov. 2014, then debuted on Showtime in Aug. 2015 (pay-1), then left Showtime for Netflix in June 2016 (pay-2), where it remained available for the next several months.
     
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  5. boukengreen

    boukengreen Legend

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    Thank you for that explanation.
     
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