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Epix Provides "Free" HD Studio Content Via TV and Internet
It looks as though the movie studios are at least trying to learn from past failures and others' success with the upcoming launch of Epix (beta starts today), an HD television channel and accompanying online 720p service. The good part about this service is, if you are lucky enough to have a television provider who decides to become a partner, you wont have to pay extra to get it. The main downside, of course, is if your cable company decides not to plug this service in you will have no way to subscribe. "Like Hulu, the Epix movie service is a joint venture formed by the content owners; in this case, the service is powered by the movie studios Lions Gate, Paramount, and MGM. The Epix TV network will air movies that are in the "pay-TV" window — those weeks before a film appears on DVD in which it is available on pay-per-view or HBO, among others."
1. Cable companies make money on pay-per-view. This product would provide the same movies for free to subscribers, and would probably cost cable companies themselves to offer it. Given that cable companies are in the business of making money, it would seem like they have every reason to avoid this.
2. The article says that Netflix isn't a viable outlet for the studios because it doesn't have many new releases.
"the real question is why the studios would launch their own distribution network instead of just offloading the films to partners already equipped to handle them? Rensing insists that the services are just too different. While Hulu does offer some films, it's focused almost exclusively on TV at the moment and is ad-supported. Netflix On Demand doesn't have access to the same super-recent hit titles." [FTFA, no edits]
How is that a reason? The studios don't let Netflix stream the new movies. That's not a distribution system issue, it's a policy decision by these very studios. It's just sloppy reporting, I guess. It should just say "The studios don't want to use Netflix On Demand."
The cable company pays them for the right to carry the service/channel. By bundling the paywall in with your cable, they (in all fairness) open up a cheap and legal means for a large number of people to watch network shows online. On the downside (and more cynical side), this is now being bundled with your cable bill whether you like it or not, essentially forcing all cable subscribers to subsidize the program.