Movies are Reelz deal

Net plans big launch with 28 mil subs

NEW YORK — Cable and satellite distributors led by Comcast, DirecTV, Time Warner and EchoStar have signed up for ReelzChannel, a 24/7 network dedicated to producing news and information shows about movies.

While the independently owned network will get only digital clearance, Reelz prexy of TV Rod Perth said the channel will kick off on Sept. 27 with 28 million subscribers.

One reason the net is off to such an auspicious start is that it charges no license fee to cable ops and satcasters; in exchange, they have agreed to place Reelz on platforms that reach more than 20% of their subscriber base.

For example, most cable systems are assigning Reelz to their digital-basic tier; for many high-tech systems, Reelz will be available in 50% or more of the homes.

Reelz’s sole source of revenue will be advertising, which figures to be lucrative because of the 28 million homes on board — and the likely high proportion of young adult viewers, who tend to gravitate toward movie-related programming, said Stan Hubbard, CEO of Hubbard Media, the Minneapolis-based broadcaster that owns Reelz.

In a departure from almost all other ad-supported cable nets, Reelz will not hand over two of its 12 commercial minutes an hour to cable systems and satcasters but will keep all 12. Perth said the Reelz affiliate sales force was able to convince cable and satellite buyers that the network needed the revenues from all of the ad time to plow back into programming, particularly since Reelz is walking away from license fees.

Reelz’ business plan calls for the net to break even by the end of the second year after total outlays of about $100 million for everything from programming and marketing to salaries and overhead.

Perth, a former president of programming for USA and its Sci Fi Channel sibling, said the network is anything but an overnight success, having first tried to launch in October 2000.

“It took us a lot longer than we thought it would,” Hubbard said. “But we could afford to be patient. We’re privately held and don’t have to meet any artificial deadlines.”

What finally opened the door for Reelz this year, said Perth, is the explosion in the number of movies flowing every month into pay TV and all of its multiplex spinoffs and into basic cable, pay-per-view video-on-demand, streaming video on the Internet, video iPods, portable media players and even cell phones.

“I think the major studios should have a stake in our success because they’re constantly looking for new ways to get the word out about their movies,” Perth said.

“The studios stop promoting their movies after they leave the theatrical and DVD windows,” he said. “We’ll keep doing shows about the movies when they get to video-on-demand and pay TV and basic cable.”

The prospect of extensive aftermarket promotions caught the attention of cable ops and satcasters, whose revenues will climb if the efforts of Reelz help to drive viewers to VOD, pay TV and ad-supported networks.

The net’s signature show will be “Dailies,” a half-hour strip with info about movies that are available somewhere that week to viewers.

Reelz has the technology, Perth added, to customize information about a movie appearing, say, on TBS by feeding a line of data about the specific cable system carrying TBS and the exact dial position, as well as the date and time.

Reelz also has bought the rights to “The Directors,” a series of 90 one-hour profiles of movie directors originally produced by John Malone’s Starz/Encore. Among helmers covered are Steven Spielberg, George Lucas, James Cameron, Robert Zemeckis and Spike Lee.

In development at Reelz are movie-related series like a movie-trivia quiz show, a point/counterpoint discussion program and various reality shows.

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