Paramount Pictures and Home Box Office on Wednesday signed a multi-year licensing deal that gives HBO exclusive pay-television rights to 85 new Paramount motion pictures, beginning with films released theatrically in May, 1988.
Paramount, a Gulf & Western subsidiary, also said it had entered into an agreement with HBO, a Time Inc. subsidiary, to finance jointly an unspecified number of original, made-for-pay-television movies. Paramount will retain all foreign and certain domestic distribution rights to those films.
The deal represents a coup for HBO and a major defeat for rival pay-television service Showtime/the Movie Channel, said Steven Rosenberg, a senior analyst at Paul Kagan Associates, a media research and investment firm based in Carmel.
Showtime had sought to lock major studios into exclusive agreements, he said. "It has, at least theoretically, mortally wounded Showtime's exclusivity gambit." Showtime officials could not be reached for comment.
He added: "What was so significant about this deal was you had the most important studio for two years up for grabs."
Paramount was Hollywood's most successful motion picture studio last year, pulling in 22% of box-office rentals nationwide. Together with affiliated services Cinemax and Festival, HBO leads the pay-television business with 19 million subscribers.
Depending on the film release schedule, the licensing agreement could run five or more years, Paramount said.