Press Release

Movies Thrive on US Basic Cable, as Media Companies Shell Out Big Bucks for Blockbusters


Competition between TV networks to air top movie content on television is so intense that some stations are willing to pay eight-figure fees, in some cases committing to healthy per-box-office-dollar payment formulas even before the movies formally open on the big screen, according to an IHS Screen Digest U.S. Cable Network Intelligence report from information and analytics provider IHS (NYSE: IHS).

Nearly 10,000 unique English-language movies aired last year on basic cable networks, accounting for 13.5 percent of total television air time of the 79 basic cable networks included in the study.

While Comcast/NBC Universal, Viacom and Disney were the three network groups with the greatest amount of total air time on basic cable, those having the largest amount of movie air time were AMC, News Corp. and Time Warner. For instance, movies on AMC Networks accounted for three percent of all air time on the 79 largest U.S. cable networks. An estimated two percent of the air time was accounted for by AMC’s other content, such as original programming like its smash series “Mad Men.”

 

On the whole, cable-network-owning media conglomerates use their existing film content in two ways: One is in opening up a dedicated movie channel like the Fox Movie Channel as an outlet for aged content; the other is by either launching or refocusing an existing network’s lineup to include significant amounts of movie content, as in the case with the TBS channel.

“The large expenditures undertaken by media conglomerates to license movies to their basic cable networks are justifiable, even if single-title prices regularly top $20 million for a first-run cable window,” said Erik Brannon, analyst for US cable networks at IHS. “A good example is the movie ‘Iron Man,’ which was snapped up by FX Network for $22 million, prior to the conclusion of its theatrical run. The expenditures are defensible because significant portions of the consuming public consider their pay-TV subscription to be of greater value than other forms of entertainment. Moreover, the number of movies aired on a cable network can be a formidable weapon in a network’s goal to increase audience size, which in turn can be leveraged to entice more advertisers.”

Of the movies shown on TV in 2011, 53 percent could be considered “fairly recent,” with theatrical debuts that came after Jan. 1, 2000. Another 20 percent appeared on the big screen between 1990 and 2000. Dramas, comedies and romantic comedies were the biggest categories.

Oldies but Goodies
Ironically, older movies sometimes can be among the timeliest of programming choices for a network.

That would explain, for example, why “Titanic” from 1996 took up the most air time of any film last year in the lead-up to the 100th anniversary of the disaster and the theatrical re-release in 3-D of the original James Cameron mega-hit. The film clocked a total of 178 hours, or 10,680 minutes, throughout the 55 times it aired on five different channel groups in 2011. In comparison, the top movie by number of times played was the 1995 film “Bad Boys” starring Will Smith and Martin Lawrence, which played a total of 75 times on eight different channels, ahead of such films as “Rock Star,” “Legally Blonde” and “Knocked Up.”

Movie content is a key ingredient to the strong performance of basic cable networks like FX and USA.

In the case of FX, the network has become a key component to News Corp.’s cable division, accounting for 20 percent of News Corp.’s total net revenue in 2011. Momentum for FX continues with the station’s acquisition of movie rights to 28 of the Top 50 films in 2011, including such blockbusters as “Transformers 3: Dark of the Moon,” “The Hangover Part II,” “Thor” and “Captain America.”

For the USA network, movies have helped the network top $1.5 billion in net revenue last year, even though films still account for a lower portion of its network airtime at 19 percent compared to FX or TBS.

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