Canadian broadcast veteran Jay Switzer is returning to the media industry with one goal in mind: giving cable and satellite companies some Hollywood content that will let them fight back against Netflix and other Internet video companies -- and hopefully make some money on the side.
Through his two-year-old private company, Hollywood Suite Inc., the former chief executive officer of CHUM Ltd. is launching a bundle of four movie channels for the Canadian TV market.
Two of the channels are branded specifically to big name studios -- The MGM Channel and Warner Films -- featuring titles from each of their libraries. The other two are theme based, focusing on action and romance/relationship films respectively, from a range of studios.
The trick is that these are specialty channels. Unlike the most popular movie channels already out there in Canada, which are mostly based on a pay-TV model that is pricey for viewers since they have to pay an extra fee just for access to that channel, Mr. Switzer's company is pitching these channels to be bundled into cable, satellite and IPTV tiers.
They can do this without conflict because the channels will show movies that come after the pay-TV "window" -- that is, pay TV stations have exclusive rights to show movies on television typically for about 18 months following the DVD releases, Mr. Switzer said. The new channels will specialize in contemporary films that are finished their pay TV run, and reach all the way back to the classic vaults.
It's a model that's not unheard-of in Canada -- some specialty channels exist with movie content. But the branded channels from Warner Films and MGM are new to the Canadian market, though they have seen success elsewhere. And like pay TV, they will be offered commercial-free (with some ads between movies but no commercial breaks during) and uncut.
"For those that don't have the 20-some-odd dollars for pay TV, we're going to be a great new destination for movies in Canada," Mr. Switzer said in an interview.
The channels have also secured multi-platform rights for the movies they show, which means that cable and satellite companies who partner with Hollywood Suite will also be able to offer that content on the alternative services they have built for subscribers to watch online or on mobile devices, such as Rogers On Demand Online or Bell TV Online. These types of "TV Everywhere" services, which are restricted to subscribers who already pay for a TV service, are a growing strategy for cable, satellite and IPTV providers to prevent churn, or loss of subscribers to other companies or even to alternative platforms such as Netflix.
The channels will show roughly 450 movies per month, many of which will be available on other platforms, including releases from major studios.
"That's more than can be said for Netflix. The emperor doesn't have a lot of clothes once you start going through the selection," David Kines, Hollywood Suite's president and co-founder said in an interview. (Mr. Switzer is the chairman of the company.)
Mr. Switzer was granted the licenses for these channels last July, and has been at work doing deals with the studios ever since.
This is a challenging time to be launching a movie channel, however. While Netflix has been criticized for not having much content in Canada, it is slowly building up its offering, and has shown that it has the money to make deals with the biggest studios. In March, it announced a multiyear deal with Paramount Pictures to show all of the studio's new releases in Canada before any television channels get a crack at them -- intruding on the turf that pay TV has traditionally occupied, with the TV window that follows theatrical releases, hotel pay-per-view, airplanes, and the DVD releases.
Mr. Switzer said the multi-platform rights allow traditional TV providers to compete with Netflix's growing influence. Agreements with cable, satellite and IPTV services will be announced in coming months, he said.
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Some of the biggest movie channels this will compete with:
Movie Central (pay) -- 962,705 subscribers, total subscriber revenue $107.8-million (includes new releases and older movies on 3 channels, classic movies on Encore Avenue, and HBO Canada) -- owned by Corus Entertainment Inc.
Mpix (pay) -- 1,629,123 subscribers, total subscriber revenue $24.1-million (includes newer and older movies on two channels as well as another HD feed for classic movies only) -- owned by Astral Media Inc.
The Movie Network (pay) -- 1,220,869 subscribers, total subscriber revenue $130.5-million (includes new releases and older movies as well as TV series on four channels, and HBO Canada) -- owned by Astral Media Inc.
IFC Canada (specialty) -- 2,829,790 subscribers, subscriber revenue $8-million and advertising revenue $1.2-million (includes mainstream and independent films as well as TV series) -- owned by Shaw Communications Inc.
Other specialty movie channels:
Sundance Channel (specialty) -- No financials available for 2010 (includes films, short films, documentaries and series) -- owned by Corus Entertainment Inc.
Silver Screen Classics (specialty) -- No financials available for 2010 (older movies) -- owned by Channel Zero Inc.
W Movies (specialty) -- No financials available for 2010 (older contemporary movies directed at women) -- owned by Corus Entertainment Inc.
Movieola (specialty -- No financials available for 2010 (short films) -- owned by Channel Zero Inc.
Movie Time (specialty) -- No financials available for 2010 (older contemporary movies and TV series) -- owned by Shaw Communications Inc.