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How ‘Homeland’ Complicates Showtime’s Transition to Streaming

Showtime’s recent expansion from premium cable channel to streaming service has hit a hitch courtesy of 20th Century Fox.

The studio recently sent a letter questioning whether Showtime was within its rights to make available “Homeland,” a series produced by Fox 21 Television Studios, on the streaming service.

Reps for both Showtime and 20th declined comment on the letter, which came to light via a report on Deadline published Thursday. But sources indicate the bone of contention is whether the contract between the companies regarding “Homeland” entitles Showtime to make current and previous episodes available on a digital outlet that didn’t exist at the time they agreed to partner on the series.

While Showtime doesn’t have subscription VOD rights to “Homeland,” studios that produce series for the cabler are contractually prohibited from licensing them to SVOD services like Netflix while they are still on the air; 20th is currently in production on a fifth season of “Homeland,” to bow in September.

Showtime launched its eponymous streaming service in July, allowing consumers who previously had to order the channel in addition to basic cable to buy it alone for $11 per month. Apple, Roku, Hulu and PlayStation Vue offer the service, which follows in the footsteps of HBO Now, a similar offering launched in April by Showtime’s premium cable rival.

But while HBO owns virtually all of the programming on its air, about 20% of Showtime’s content comes from external studios, though some of these shows are among the cabler’s biggest successes. In addition to 20th/”Homeland,” for instance, Warner Bros. produces “Shameless” and Sony Pictures Television produces “Masters of Sex.”

That said, Showtime sometimes retains SVOD rights for series it doesn’t produce outright. One exception is the recently concluded “Nurse Jackie,” which Lionsgate co-produced with Showtime.

But while Showtime and 20th could conceivably renegotiate terms of their deal to avoid any legal faceoff over “Homeland” being on the streaming service mid-run, Showtime could conceivably find itself in an interesting predicament one year after the series ends. With 20th then fully in control of “Homeland’s” SVOD rights, the studio could conceivably keep the series off of Showtime’s streaming service if another bidder like Netflix is willing to pay for exclusive rights.

That could force Showtime to pay a considerable premium to keep “Homeland” once the series is done on its own air. It’s also possible Showtime won’t be able to hold on to  a post-run”Homeland” exclusively, much the way it already shares with Netflix some of its biggest retired shows, including “Dexter,” “The L Word” and “Weeds.”

While there’s a chance to retain “Homeland” non-exclusively, such an arrangement could slightly dilute the value proposition of a streaming service that has to share some of its classics with a bigger competitor.

However, a hit series like “Homeland” isn’t expected to end anytime soon. Nevertheless, it’s these kind of issues that Showtime and 20th have to begin talking through sooner than later.



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