Malaise For Premium Cable Networks? Consumers Pinpoint Distribution Errors

Watch what consumers do in this recession; they'll figure out all the tricks of economic media efficiency.

Perhaps it started when some financially strapped young families starting abandoning their monthly cable packages for a single-media broadband access wire into their homes, connecting laptops to TVs to get that bigger bit of programming.

But they're probably overlooking those still-pricy premium channels. Liberty Media notes its Starz premium channel division service has slipped some -- 3% for its Starz network and 1% for its Encore channel in the second quarter as compared to the first.

DirecTV says it is seeing a slowdown of consumers buying premium services. But Les Moonves, president and chief executive officer of CBS Corp., says this is not the case for Showtime. He sees no downturn.

Still, Epix, the new premium channel, a joint venture of Viacom, Lionsgate and MGM, has been a slow-moving effort -- only getting to its first carriage deal recently, and that with the still-tiny telco video service from Verizon.



HBO, Showtime and the likes are increasingly trying to take a page out of the ad-supported cable playbook, touting their original series, with decreasingly less emphasis on theatrical movies. Epix was started, in part, because bigger premium channels were following this strategy -- and films from movie studios like Viacom's Paramount Pictures, Lionsgate, and MGM still needed a home.

But the growing premium cable channel problem doesn't lie just with the recession. A plethora of new and existing media platforms for movies -- from iTunes to Netflix -- are carving up that once-prized pay-TV theatrical window.

All this confusion comes from big content owners themselves -- sometimes with the knowledge they don't have all the answers. But don't worry. Media consumers will set them right.

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