Talk about a crummy time to launch a movie channel. For more than two years the country has been mired in a recession, consumers have snapped shut their wallets, and Wall Street and cable operators have questioned the need for yet another premium cable service offering Hollywood movies.
Mark Greenberg, the channel's top executive, must have felt like a luxury car salesman -- few customers coming through the doors.
Like the economy, business is slowly picking up for Greenberg. The Epix movie channel premiered in October on Verizon's pay television service Fios. The channel is a joint venture of three Hollywood studios: Viacom Inc.'s Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer. Since then, Greenberg has negotiated deals to land Epix (pronounced like "epics") on more systems, including cable operators Charter Communications and Cox Communications.
Although it's still losing money, the start-up hopes to break even in 2011. Epix, recognizing how technology is reshaping TV viewing, was designed not only as a television channel but also to offer video on demand and movies over the Internet.
The architects were confident that younger viewers would view movies as easily on their laptops as on 52-inch TV screens, leading Epix to quickly embrace the TV Everywhere concept, which lets people watch TV shows on cellphones or computers -- as long as they already are a pay TV customer.
This week, we caught up with Greenberg, a veteran of pay cable channels Showtime Networks and HBO, to talk about the channel's progress.
Some were betting Epix might never get off the ground. How did you do it?
The economy was tough on everyone. We used that as an opportunity and allowed our clients to package and price the service to maximize the value. We have been on the air for less than 90 days and people have seen that it is actually working. Our broadband offering made us the first ones to really authenticate on a broad level and provide TV Everywhere. We weren't charging additionally for it, we were strategically pricing it in a way that allows the companies to package and bundle the service. They can get films like "Star Trek," "G.I. Joe," "Indiana Jones," "Saw" and [franchises like] Tyler Perry and Pink Panther. It's the power of the library and new releases.
Do you think the broadband offering will become Epix's calling card because of younger consumers' propensity to watch video on their computers?
It's going to be different. My dad, who is 88, still thinks TV is a linear experience to sit back and watch, and he won't change. My generation is willing to order on-demand movies through the set-top box. This younger generation, 18- to 35-year-olds, clearly see the Internet as another way. They have seen that we can reach out to this new emerging audience, the next-generation pay TV customers, and say, "OK, I can deliver movies the way you want, not the way that I think you should have it."
How many homes will you reach by this summer?
"Between Verizon, Cox, Charter, Mediacom and the National Cable TV Cooperative, we can reach a foot-print of about 20 million potential homes. Within that, our guess is that we will come out of the gate with around 3 to 4 million homes that will be actual subscribers within that mix -- and growing.
Is that enough to make the channel viable?
"No, but it helps. We are having conversations with the rest of the distributors. Those discussions are continuing in a significant way. I don't think that anyone creates a business for 20% of the country; we are looking to do far more than that.
How have the financial problems of MGM, one of your founding partners, affected Epix?
It really hasn't. The most important thing that MGM has is its phenomenal library. We have done our deals with MGM to guarantee our output of library titles over the next several years. The management team has been very helpful. They continue to have a pipeline of new releases, but the real impact has been great access to the library, great franchises like James Bond and the Pink Panther.
The established pay TV movie channels used marquee events to get started. Are you looking for something to pop?
We launched on the first night with a Madonna concert taped live from Buenos Aires. Last month we had a Kings of Leon concert and we will be doing other major concerts. We did a Lewis Black comedy event and Eddie Izzard. We have used comedy and concerts to provide high-profile shows. We are in discussions with the Black Eyed Peas to do a concert for us later this year, and we have been in development on the scripted side with our partner Lionsgate, which has a great TV group.
Conan O'Brien is available.
I think everyone is talking to Conan. If he wanted to do a special for us, we would love to have it.