Lion links Via Digital
CSD rival scores coup as MGM inks in Spain
The deal includes all new MGM movie titles, beginning with "Tomorrow Never Dies," the 18th installment in the James Bond franchise, "The Man in the Iron Mask," "Red Corner," "Species II" and "At First Sight." The agreement also involves the licensing of 350 films from MGM's 4,000-title library.
Coming in the wake of the European Commission's ruling against a single digital platform in Germany, the deal in Spain suggests that the two players in that territory plan to continue to compete rather than to merge.
For Via Digital the tie-up with MGM represents its first transaction with a major American studio, beyond a library deal with 20th Century Fox brokered by Via's biggest channel supplier, the Barcelona-based Media Park; the six other Hollywood majors have already inked digital deals in Spain with rival platform CanalSatelite Digital (CSD).
The deal also represents the biggest move made to date by Via Digital's new management team, which is clearly bent on giving rival CSD a run for its money. The Sogecable-owned CSD recently lost Sogecable CEO Ele Juarez, the exec responsible for tying up his platform's deals with six of the major studios.
The deal will be unveiled with much fanfare at the Palace Hotel in Madrid today by MGM Intl. Television Distribution president James Griffiths, and Pedro Perez, chairman of Via Digital.
After Germany and France, Spain is the third European market in which the majors have tied up long-term pay TV rights with one or the other digital platform. As a result, the Hollywood majors are writing hundreds of millions of dollars onto their books each year.
The MGM deal with Via Digital is for six years and is thought to be worth between $50 and $75 million over that time period.
The films included in the deal will be available to Via Digital's pay-per-view service and its Gran Via premium movie channel. The two partners are also discussing the possibility of a branded MGM program block on the platform.
Via's first direct studio deal could well open the door to "second phase" dealings with the majors as it focuses on rights left untouched by CSD agreements. The MGM agreement "enhances our programming and reinforces our commitment to deliver the best digital entertainment and services to our customers," Perez told Daily Variety.
"This transaction validates our strategy of building asset value through aggressive licensing deals of new as well as library product, capitalizing on the exceptionally strong international appetite for content," Griffiths said.
MGM will be better positioned to take advantage of burgeoning demand abroad as long-term free and pay TV deals in key Euro territories negotiated by the Giancarlo Parretti regime at MGM expire over the next few years. In Spain, for example, most MGM product has been tied up since the early '90s by the regional broadcast consortium Forta, but those free-TV licenses are currently coming to an end.
The Hollywood studio raked in $120 million from free TV outlets abroad and $59 million from foreign pay TV outlets in 1997, per MGM's latest annual report.
Via Digital launched its service late in 1997 and has attracted 360,000 subscription applications in less than nine months, with 275,000 dishes installed. Its backers are Spanish telco Telefonica, pubcaster Rtve, Mexican media conglom Televisa and DirecTV. CSD launched in January 1997 and by mid-June 1998 had installed 500,000 dishes.
