Don Groves is a Deadline contributor based in Sydney.
The seven Movie Network channels owned by Warner Bros, Disney, Village Roadshow and MGM will go dark on January 1 following a decision today to dissolve the partnership. The end of the service, which was a mainstay in Australia pay-TV since its inception, follows the inability of TMN to negotiate a new deal with the dominant platform Foxtel as the current contract expires December 31. A Foxtel spokesman confirmed the TMN channels will disappear from its service on January 1. Foxtel wants to launch a single movie service in 2013 after buying the other major movie service Showtime from Paramount, NBCUniversal, Fox, Sony and Liberty Media in October. The Foxtel spokesman told Deadline that negotiations are continuing with individual studios, adding, “Our preferred position is to have a single service with improved quality for viewers.” He said a new line-up of movie channels and repricing would be announced soon.
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The TMN partners had tried to negotiate through TMN, figuring they would have a better bargaining position than if each dealt separately with Foxtel, but there were reports last week that WB/Roadshow had broken ranks and was in discussions with Foxtel. It’s no secret that Foxtel wanted to end the competing movie services and cut costs by eliminating the middle-men and costly output deals that were bloated with telemovies and direct-to-DVD product. Foxtel was seeking to lower license fees paid to the studios and to Australian independent distributors by as much as 40%, regarding movies as a much less valuable commodity than a few years ago, while it forks out hefty sums for live sports rights. The four Showtime studios got the first-mover advantage of striking exclusive deals with Foxtel, meaning the TMN partners were offered less attractive, non-exclusive terms. Negotiations with the indies are continuing.