Encore to Launch Pay Cable Movie Channel : Entertainment: The news sets off accusations from rival Showtime/TMC that Encore is trying to monopolize pay TV.

Cable’s Encore channel said Thursday that it will launch a new pay TV network next year using films it has licensed from Walt Disney Co. and other Hollywood studios.

The movie network--which would attempt to buck the trend of stagnant pay TV viewership--is being supported by Denver-based cable giant Tele-Communications Inc.

Encore’s announcement immediately set off a tirade from executives at Showtime/The Movie Channel, who accused Encore and TCI of trying to monopolize the pay TV business. Showtime/TMC is owned by Viacom Inc., which last week sued TCI over alleged monopolistic practices in the cable industry and accused its chief executive, John C. Malone, of “bully-boy” tactics.

“Why are they doing this?” asked Anthony Cox, president of Showtime/TMC. “I think it’s because (TCI and Malone) are out to control another part of the entertainment industry.”

Cox said Showtime/TMC had been negotiating with Disney for the same film package--estimated at 360 titles over a seven-year period beginning in 1996--but Encore bid 25% more than Showtime/TMC was willing to pay. The deal is valued at about $1.5 billion and follows other deals that Encore has made with Universal, New Line/Fine Line and Carolco.

But Encore Chief Executive John J. Sie rejected his competitor’s charges and said he is trying to create a new, lower-cost pay cable movie channel that would better fit into the coming world of 500-channel cable systems.

“I like to compete and I’ve built a better mousetrap,” Sie said. “If that’s bad, then I don’t know what’s good.”

Encore, launched in 1991 with backing from TCI affiliate Liberty Media Corp., was designed to revitalize the pay TV industry. Pay channels like HBO, Cinemax, Showtime and The Movie Channel had remarkable growth through the 1980s, but subscriber levels have remained flat in recent years. Encore, which shows classic movies from the 1960s and 1970s, was the first of the so-called “mini pay” channels that cost less than half what HBO or Showtime charge.

The new Encore channel will be called Starz! and is targeted to compete directly with other pay TV channels. Earlier this year, Encore launched six other movie channels programmed around themes such as Westerns, mysteries and romance. Sie said Starz! will initially appear only on TCI cable systems and then be rolled out nationally. He estimated that Starz! and Encore could eventually be sold as a package costing between $5 and $6 a month.

Pay TV channels in recent years have had an increasingly difficult time attracting and retaining subscribers because of home video and better programming on basic cable.

As a result, pay channels such as Showtime and HBO have been forced to start new businesses, whether a low-cost movie network like Showtime’s Flix channel or the launching of a Spanish-language version of HBO in Latin America.

Encore has about 4 million subscribers, though most of them are on TCI systems. Market leader HBO has about 17 million subscribers, and second-ranked Showtime has 7 million.

Encore’s Starz! is the most direct challenge to date of dominant pay TV services HBO and Showtime.

Already one of the biggest players among basic cable services--TCI owns significant stakes in Turner Broadcasting System and Discovery Channel, and affiliate Liberty Media holds stakes in two dozen basic cable networks--TCI has long wanted to establish a presence in pay TV. In 1989 the company had an agreement to buy a 50% interest in Showtime, but it never completed the deal.