From its inception, Epix was destined to be a trailblazer for an industry on the cusp of disruption.
The premium TV service was initially conceived in 2007 as a joint venture of Blockbuster Video, Comcast and Lionsgate. At that time, YouTube was only 2 years old but growing fast enough to strike fear in the hearts of media titans. NBCUniversal and News Corp. were a few months away from launching their “YouTube killer” service, Hulu. Netflix had just introduced the streaming option to its rent-by-mail DVD service that had about 7.4 million subscribers.
What a difference a decade makes. Ten years after Epix made its linear debut on Oct. 30, 2009, the media landscape has been up-ended by the growth of streaming and the steady pace of consolidation among traditional media giants. Epix, now a wholly owned unit of MGM, was designed from the get-go to be a multiplatform offering for consumers — and it was done so before most people in the industry knew what “multiplatform” meant.
Today, Epix has shifted much of its emphasis to original series to stand out with viewers and help MGM capitalize on the seemingly insatiable global demand for high-end, multi-part series content. But the company’s roots as a showcase for new theatrical features is still reflected in the brand refresh rolled out during the past year under the new regime led by CBS and Turner veteran Michael Wright. He was named president in November 2017, two months after the departure of Epix’s founding CEO Mark Greenberg.
“We are in the curation business,” says Wright. He notes that the channel’s volume of original series and specials went from 27 hours in 2017 to more than 90 hours this year. Among the high-profile new series are scripted dramas “Godfather of Harlem” and “Batman”-adjacent “Pennyworth” and unscripted docu-series such as “Punk’d,” a history of punk rock, and the upcoming adaptation of the historical-oddities podcast “Slow Burn.”
“The brand here is what we call ‘cinematic television,’ or television for movie lovers. We’re after the people who don’t go to the movies as much as they used to because they can’t find the kind of movies they used to love any more.”
Blockbuster Video was essentially put out of business a decade ago by the rise of Netflix and cable video-on-demand services. But history will show that the management of Blockbuster made the epically short-sighted decision to drop its plans to launch a streaming service in 2008 in favor of a hostile takeover bid for another dying business, consumer electronics retailer
Epix co-founder Greenberg, a marketing and distribution alum of HBO and Showtime, had been hired by Blockbuster Video as a consultant to help it plan for the future. Greenberg was tasked with developing a business plan for a movie-centric streaming service from Blockbuster, which already had strong relationships with all of Hollywood’s major studios. Lionsgate was already on board as a partner, and Comcast was also recruited. At the time, Comcast had yet to acquire NBCUniversal, but it did own about 20% of MGM as part of the consortium that acquired the famed studio in 2004.
By early 2008, Blockbuster Video had undergone a management shakeup and it backed out of the streaming venture. Comcast also bailed on being a partner in Epix even though MGM remained committed. Comcast suggested to Greenberg that he reach out to Paramount Pictures’ parent company, Viacom, and sure enough, then-CEO Philippe Dauman was game.
Greenberg and executives from Lionsgate, MGM and Viacom and a platoon of lawyers spent a marathon week on the 52nd floor of Viacom’s Times Square headquarters hashing out the terms of the Epix launch agreement in late April 2008. Lionsgate, MGM and Paramount Pictures committed to giving Epix the exclusive pay-TV window to new theatrical releases starting in 2009. That pipeline was enough to launch a service and deliver a blow to established pay TV titan Showtime, which previously had output deals with the three studios.
The trio of Epix partners were open to a radical shift in pay-TV strategy for theatricals because Showtime had made it clear to the studios that it planned to spend less money on movie rights and more on original series in the coming years. That gave the trio the incentive to pool their resources on a new venture.
“It was an extraordinary experience,” says Greenberg. “We pushed the edge of the envelope and we pushed other people into the [streaming] space.”
One of Epix’s initial selling points was the ability to offer its subscribers streaming access to the channel’s movie titles as an incentive to buy the linear service. In fact, the commercial debut of Epix as a brand came a few months before the linear launch when it was offered as a SVOD service via Verizon Fios.
Epix came on to the scene on the heels of the global economic meltdown over the mortgage crisis.
There was skepticism in the pay-TV world as to whether there was enough demand for another pay-TV service to compete with HBO, Showtime and Starz. Greenberg found that gaining traditional cable distribution for Epix was more of an uphill climb than he expected.
Deals with the nation’s two largest MVPDs — Comcast and DirecTV — were only inked in June 2018 and May, respectively.
The breakthrough came in August 2010 when Epix set a groundbreaking five-year licensing deal with Netflix that was worth just under $1 billion. That made the company profitable and allowed it to expand its scope into original programming, something that was on the original blueprint.
“Even though movies account for something like 80% of the viewing on most [pay-TV] channels, they are defined by original programming,” Greenberg says. “It was always in the business plan.”
Epix’s early original series efforts included the spy thriller “Berlin Station,” the offbeat Nick Nolte comedy “Graves” and the critically praised dramedy reboot of the 1995 MGM movie “Get Shorty.”
MGM bought out Lionsgate and Viacom’s interests in Epix for about $1.3 billion in 2017. The Lion is focused on building up Epix as a launching pad for original content that can be monetized through international sales. The company’s investment in original programming will be seen next year as Epix rolls out a host of fresh content. Its upcoming slate includes the ITV co-production “Belgravia,” a historical drama, as well as an adaptation of Kurt Vonnegut’s “Slaughterhouse-Five.”
“Godfather of Harlem” is the strongest expression yet of what Wright describes as Epix’s strategy of courting what he believes is an underserved audience with sophisticated tastes.
Epix hopes its new wave of high-end dramas and documentary programs will appeal to viewers who previously flocked to independent films and the kind of adult drama and comedy fare that has been crowded out of the multiplexes by big-budget tentpoles and superhero pics. “The goal is to have original episodes every week,” Wright says. “We want to give them the kind of sophisticated material that would have been a movie 10 years ago.”
Wright offers his appreciation for the vision and the infrastructure built by Greenberg and his team. The next chapter for Epix will revolve around working hard enough and creatively enough to make what is still a young media brand stand out in a sea of choices and in competition with much deeper pockets.
“This is a collaborative business,” Wright says. “It’s a very competitive market out there. We have a passionate team of really cool people who are ready to build this up to the next level.”