Report Sees Rising License Fees for Movies on Basic Cable

EL SEGUNDO: The competition for first-run basic-cable rights to blockbuster features is heating up in the U.S., according to an IHS Screen Digest report, with some channels willing to shell out eight-figure licensing fees for top-tier titles.

According to the IHS Screen Digest U.S. Cable Network Intelligence report, U.S. basic-cable networks aired almost 10,000 English-language films in 2011, accounting for 13.5 percent of total television air time of the 79 channels included in the study. Of the movies aired last year, 53 percent were theatrically released in the last 11 years and 20 percent were released between 1990 and 2000. The film that took up the most air time—178 hours—was Titanic, with 55 airings on five different channels in 2011. The most-aired title, however, was Bad Boys, with 75 broadcasts on eight channels.

“The large expenditures undertaken by media conglomerates to license movies to their basic-cable networks are justifiable, even if single-title prices regularly top $20 million for a first-run cable window,” said Erik Brannon, analyst for U.S. cable networks at IHS. “A good example is the movie Iron Man, which was snapped up by FX Network for $22 million, prior to the conclusion of its theatrical run. The expenditures are defensible because significant portions of the consuming public consider their pay-TV subscription to be of greater value than other forms of entertainment. Moreover, the number of movies aired on a cable network can be a formidable weapon in a network’s goal to increase audience size, which in turn can be leveraged to entice more advertisers.”

The study notes that movies have been key to the success of networks like FX—which acquired the rights to 28 of the top 50 films in 2011—and USA.