Studio signs carriage deal with DirecTV

MGM has quarried its 4,100-title movie library to create a 24/7 high-definition cable network called MGM HD, signing its first carriage deal with DirecTV.

The network, which will premiere on DirecTV before the end of the year, starts with titles such as “The Black Stallion,” “West Side Story,” “Leaving Las Vegas,” “RoboCop” and “Hotel Rwanda.” MGM HD will accept some advertising but not interrupt the movies with commercials.

“The growth of the MGM library and the further expansion of the MGM channels worldwide are the studio’s primary objectives,” said Harry Sloan, chairman and CEO of MGM.

Although MGM HD is the studio’s first foray into the cable-network business in the U.S., MGM movie channels reach viewers in more than 100 countries across the globe.

Initially, MGM HD will consist of nothing but movies. But in the works are “exclusive behind-the-scenes coverage of red-carpet events, sneak peeks at new films in production, seasonal promotions and world premieres of newly re-mastered hits from the MGM library,” according to the studio. On the last point, for example, when the Clint Eastwood western “The Good, the Bad & the Ugly” makes its debut on MGM HD, the studio will treat it like a special event.

Jim Packer, co-president of worldwide TV for MGM, said MGM HD plans to “differentiate itself” from cable networks that will just upconvert their signals to emulate high def. MGM HD is doing the lab work, Packer said, to turn 35m prints into high-resolution 1080i, the purest form of HD. “That’ll give us an advantage,” he said. An MGM spokesman added that the studio has already created 1080i versions of 1,200 of its titles, with more in the works.

MGM’s studio competitor in this area is Universal HD, but movies are only one element in its programming mix, which includes episodes from Universal-owned series such as “Law & Order: Special Victime Unit,” “Monk” and “Battlestar Galactica.”

Derek Chang, executive VP of programming and strategy for DirecTV, cited MGM’s “brand recognition and entertainment assets” as the reasons he signed MGM HD as part of an ambitious plan by the satellite distributor “to launch up to 100 HD channels by the end of the year.”

MGM’s business plan calls for DirecTV and future distribution partners (cable operators, telco distributors, etc.) to pony up cash license fees for MGM HD based on the number of subscribers with HD TV sets who pay extra each month to get the high-def tier where the network will reside. The parties declined to reveal the license fee MGM will pocket from DirecTV.

The beauty part for MGM, Packer said, is that it won’t rack up big programming expenses like most network startups because it owns all of the movies in its library.

MGM is counting on the explosive growth of high-def TV sets in the U.S. to ignite the demand for MGM HD from cable operators and from AT&T and Verizon, the phone companies that are selling a program service to its customers featuring all of the cable networks offered by cable ops and satcasters.

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