Longer Universal tour at HBO

Output deal extended through '15

Universal Pictures has signed an extension to its output deal with HBO, the companies said Wednesday.

Details of the pact were not disclosed, but it will keep the studio's films on the premium cable service's flagship, multiplex and on-demand channels through about 2015. The deal also covers Universal specialty labels Focus Features and Rogue Pictures. The extension builds on an existing deal that kept Universal product on HBO from 2003-11.

Typically worth hundreds of millions of dollars, output deals are a key component of how studios finance films. However, the value of the 18-month pay TV window has been diminished in recent years with the growth of DVD and VOD.

"This agreement is a very important piece of the financial structure of our films, and we are extremely happy to announce its completion," Universal Pictures vice chairman Rick Finkelstein said.

Universal is just one of the key deals HBO has in place with the major studios, including 20th Century Fox, Warner Bros. and New Line Cinema. The studio has delivered to HBO such top-grossing films as "King Kong" and "The 40-Year-Old Virgin."

As with previous deals, the pact likely will allow HBO to distribute Universal films online as long as they stick to the subscription format. However, HBO has yet to implement such a strategy. For all its success in original programming, about two-thirds of HBO's schedule comprises theatricals.

"As we continue to explore opportunities for our company in this evolving digital landscape, this long-term agreement helps solidify HBO's position as the leader in the subscription business," said Harold Akselrad, executive vp and general counsel at HBO.

HBO's prime competitors have major studio deals of their own. Starz Entertainment Group has long-term pacts in place with Sony Pictures and the Walt Disney Co., while Showtime has Paramount Pictures, MGM and Lionsgate sewn up.

The negotiations were led by Frances Manfredi, senior vp and general sales manager at NBC Universal Domestic Television Distribution, and Doris Casap, senior vp film programming at HBO.
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