Two-year-old pay-TV startup Epix is entering a new phase of its life with a first-time branding blitz and the potential for fresh digital dollars.
The profitable movie channel, backed by Viacom’s Paramount, Lionsgate Entertainment and Metro-Goldwyn-Mayer, is kicking off an ad push today aimed at increasing subscribers ahead of its third birthday in October. The $8 million marketing campaign includes TV and radio spots along with billboard ads across the country.
Epix, run by President and CEO Mark Greenberg, aimed to shake up the premium TV market dominated by HBO and Showtime when it was announced 2009. While some skeptics said it would fail almost as soon as it started, the channel has lasted longer than many predicted.
Epix has garnered 10 million pay-TV subscribers, although it lags rivals HBO, Showtime and Starz, which pull in between 20 million and 30 million subscribers. The channel is carried by Verizon FiOS and mid-tier outfits like Cox Communications, Charter Communications and Dish Network.
In 2010, Epix cut a $900 million exclusive deal with Netflix that probably turned off some major distributors such as Comcast, DirecTV and Time Warner Cable. That partnership, however, put Epix in the black and added around 23 million households to its footprint.
Still, the Netflix exclusivity period is running out at the end of September, at which point Epix can start shopping its movie library, including Lionsgate blockbuster “The Hunger Games” later this year, to the likes of Amazon’s Prime movie service or Comcast’s own Netflix-killer, dubbed Streampix.
Netflix could also pony up and continue the exclusive nature of its deal, which gives it movies 90 days after they are released in the DVD window and around eight months after their theatrical release.
“Netflix is an important customer. We’ll see if it remains important to them or not,” Greenberg said. “They have the option for exclusivity, if not, then the digital space is open.”
While other premium channels are gearing up spring-summer original series, Epix has chosen to focus instead on comedy and music specials as well as boxing to supplement its movie offerings.
The TV ad campaign is tied to a free preview period starting this month and will feature the tagline, “We Get Big Movies.” The ads take shots at rivals and were rejected by CBS, which took exception to a negative reference to its sister Showtime channel.
Epix, which launched in part when Viacom’s Paramount failed to come to terms with Showtime, charges about $1 per subscriber based on reports at the time of its debut.
While Epix has aggressively pursued so-called over-the-top distribution deals with Netflix and Microsoft’s Xbox Live service, customers still have to enter their information to prove they are paying subscribers.
That gives Greenberg confidence he’ll be able to pull off more deals with larger distributors that are also pushing paying customers to do the same in order to access more Web-delivered and on-demand content.
“We have a few remaining [distribution deals],” Greenberg said. “We are hopeful. It took other networks a lot longer to get full distribution.”