A new alliance in the volatile home-entertainment field was forged Tuesday between Viacom International, the giant communications conglomerate and parent of Showtime/The Movie Channel, and the Cannon Group, the fast-growing independent movie producer.
The nine-digit, three-year deal will determine where on TV "Superman IV" ultimately flies and "Runaway Train" runs. Those, along with "Death Wish 3 and 4," are among the 60 feature films produced by Cannon that will be released on pay cable exclusively by Showtime/The Movie Channel and sold to network and independent commercial TV stations by Viacom Enterprises.
"We may not both be No. 1 yet, but I think we are (now) closer in our striving to get to that point," said Peter Chernin, executive vice president of Showtime/The Movie Channel at a Beverly Hills press conference.
Cannon, which has recently announced deals with such stars as Chuck Norris, Roy Scheider, Diane Keaton and Sam Shepard, will get an undisclosed figure topping $100 million from Viacom to fuel Cannon's big Hollywood dreams. Showtime, the No. 2 pay-cable service, will acquire from Cannon a list of movies that will not be seen on its chief competitor, the larger Home Box Office.
In addition, Showtime's pay-per-view channels, Viewer's Choice 1 and 2, will be offering approximately 40 of the Cannon films to viewers via cable for a one-time charge at about the same time as their release on videocassette. Viacom will not handle Cannon's videocassette releases.
The deal gives one company, Viacom, control over several slices of the hefty home-entertainment pie. Starting 15 months after the films' play dates in theaters, Viacom will release them consecutively to pay per view, pay cable, network TV, then syndication to local TV stations.
The deal signifies a return to the intense competition for acquiring films that marked the so-called "pay-TV wars" a few years ago. It could also foreshadow a similar situation in broadcast TV.
"The syndication market is burgeoning," said Fred Schneier, senior vice president of Showtime/The Movie Channel. The Cannon films could generate as much revenue when they air on local TV stations across the country as they could on Showtime, which in some cases will telecast them years earlier.
Schneier suggested that the movies will be worth more on commercial TV because of their more limited exposure on pay TV via their exclusivity to Showtime and The Movie Channel. The development of so-called fourth networks, like Fox Television, the former Metromedia stations purchased by 20th Century Fox, is also expected to up the ante for Hollywood films shown on TV.
Showtime expects this and other similar exclusivity deals to help it hold onto subscribers by "differentiating" its service from HBO's, Chernin said. The theory is that subscribers--or potential subscribers--are aware of which services feature which movies, much as they know the difference between the overall fare on NBC, CBS and ABC.
Showtime currently has a five-year exclusive deal with Paramount that has given it such films as "Terms of Endearment." HBO, meanwhile, is in the midst of exclusive deals with Columbia Pictures, Tri-Star Pictures (of which it is part owner) and Orion Pictures.
Showtime and HBO often have rights to the same films. But both services continue to arrange for exclusive rights on a picture-by-picture basis with production companies. That's how Showtime and The Movie Channel acquired "Amadeus," currently on their schedules. HBO will have a similar arrangement with Steve Martin's coming "The Three Amigos."
Cannon, for its part, has been making announcements in the Hollywood trade papers virtually daily about its lineup of talent. Cannon president Yoram Globus added Whoopi Goldberg and John Travolta to that list Tuesday, saying they will star in "Public Enemies" for Cannon.
Globus also insisted that Dustin Hoffman is still set to star in "LaBrava" for the company, though spokesmen for the actor said last week that he was pulling out due to breach of contract.
Globus, speaking in his thick Israeli accent, summed up what he believes is the importance of competition for product when he said, "If everybody gets everything, it becomes like boring."