Don Groves is a Deadline contributor based in Sydney.
Could seven Hollywood-owned pay movie channels go dark in Oz on January 1? That seems a distinct possibility as The Movie Network’s contract with Foxtel expires on December 31. TMN is owned by Warner Bros., Disney, MGM and Australia’s Village Roadshow. Foxtel is trying to use its clout as the dominant pay-TV force by cutting out the middleman and buying films direct from each studio and owning and producing all its major movie channels. The TMN studios are presenting a united front, reasoning they will have a stronger bargaining position collectively than if each tried to do separate deals. Last month Foxtel went a long way toward achieving its goal when Sony, NBCUniversal, Paramount, Fox and Liberty Media agreed to sell their Showtime channels to Foxtel. Foxtel has been seeking to drive down the historically inflated license fees by as much as 40% and to end the output arrangements which enabled the studios to cram the schedules with telemovies and direct-to-DVD titles.
Related: Australia’s Foxtel To Majors And Indies: Take A 40% Haircut On Movie Deals
It is possible that Foxtel will offer to extend TMN’s contract, at least for a few months, while negotiations continue. Or TMN could exercise an option to extend for one year a separate deal with Austar, the regional satcaster that Foxtel acquired earlier this year. That would create a logistical nightmare for Foxtel which is phasing out the Austar brand and migrating customers to its service. Foxtel also is negotiating new contracts with the four largest indies, Hopscotch eOne, Icon, Studiocanal’s Hoyts and Transmission. The indies were alarmed initially at what they considered were lowball offers which bore little relation to the fees they were accustomed to getting from Showtime. Subsequently Foxtel has shown more flexibility, especially in setting fees tied to Australian box-office earnings, Deadline has learned.