Q&A: Epix president/CEO Mark Greenberg
Exec wants to create more than just another premium channel
Illustration by Chris Morris
The Hollywood Reporter: Epix had trouble getting distribution deals early on, but you've had a steady stream lately. What was holding things up?
Mark Greenberg: There were a couple of things that happened. The economy certainly went for a radical change from the time we announced (in April 2008) to the time we launched. But we always planned on 18 months, largely because two of our three partners had commitments for pay TV at another network (Showtime). Until you are real and you have launched, that's when distributors say, "OK, let's get into a meaningful conversation." Since then, we have done deals with Verizon, Cox, Charter, Mediacom, NCTC and recently Dish.
THR: When you launched, such distributors as Comcast and DirecTV said they don't really need more premium TV services. How are you different?
Greenberg: We don't see ourselves as the fourth premium network. We see ourselves as another way to reach a younger demo by building a multiplatform approach. We always said we'd take our linear channel and our on-demand and put it on broadband. That younger demo, especially 25-44, is really going there. Generating the next users is about building platforms for the way they want to watch, as opposed to the way we tell them to watch. We will also be able to authenticate mobile.
THR: Do you need a deal with Comcast and/or DirecTV, the two biggest U.S. distributors?
Greenberg: They both represent big parts of the footprint -- close to 40% of the country. You always want to get deals done with important clients like that, and Time Warner Cable. But all are important because we want to be ubiquitous. We represent 15,000 library titles plus our originals, so it's significant content for the home.
THR: How many actual subscribers do you have right now?
Greenberg: Everyone has packaged it differently. But with Cox putting us on a movie tier and Dish having us on their HD tier, we added several million subscribers upon launch, which was really exciting for us. We'll probably know more about where we are in three or four months.
THR: If MGM, one of your partners, gets sold or taken over by creditors, how would that affect you?
Greenberg: I think they see the light at the end of the tunnel and are moving to a conclusion, which is very positive for Epix. They recently released "Hot Tub Time Machine," which will be a great pay TV movie. Once they restructure, we'll get more theatricals from them. But they have a brilliant library that we have tapped into as the past year they have released fewer movies.
THR: How about Lionsgate, which is being stalked by Carl Icahn?
Greenberg: It's been business as usual for us. (CEO Jon) Feltheimer and (vice chairman Michael) Burns have kept their hand on the wheel, and they have a good slate of movies for the year. And no studio has been hotter than Paramount over the past year, so we feel really good about our partners and where we are. They have been strategically involved and very focused on moving this forward.
THR: Would new owners at MGM or Lionsgate affect your film rights?
Greenberg: We did a multiyear deal with an option for multi years on top of that, so we are contractually protected. They have been enormously supportive of this venture. And where would they go? The reason they did this venture is they wanted to more strategically take their content and generate revenue off it. Would they want to get out of Epix? No.
THR: Where do you stand on original-content development? Do you still expect to have a first show later this year? And will that be the Nashville dynasty drama "Tough Trade"?
Greenberg: We'll likely have the first original late this year or early next year. "Tough Trade," for which we recently shot a pilot, has Sam Shepard in a lead role. Having studio partners, we get access to the right talent. Jenji Kohan, who is the showrunner, is a perfectionist; she wants it to be brilliant. I expect us to make an announcement on "Tough Trade" shortly. Country has a huge fan base in this country. And I like the idea of a show not done in New York or L.A.
THR: How about "Atlas Shrugged"? And will we see Charlize Theron in it?
Greenberg: I'd put it in the same category. We have seen some great scripts. We feel really good about it as a miniseries but haven't greenlighted it yet. We are waiting for the right talent and think it must be someone of marquee value -- a great, trained actress. Because we are uncut and commercial-free, you can portray that in a way that it should be. There is a shortlist. Charlize Theron would be fabulous, but so would some others. A lot of it comes down to timing and scheduling.
THR: You also have done concerts and comedy shows.
Greenberg: We have done a lot of live events, concerts and comedy. Madonna, Kings of Leon, and we just did the Black Eyed Peas, which will be out shortly. It's a great event. We have done Eddie Izzard and Lewis Black, and we have more comedy events coming. Those are great staples. We are also buying some docs. Both series and miniseries will become part of the mix. How many will depend on what we bring to the table, because we want to do them right. We will build it one brick at a time. And our key 25-44 audience likes all that.
THR: How much money do you have available for original programming and how many shows and minis could you do a year?
Greenberg: We have an overall programming budget, and we can get there by buying a few more movies or doing another original. We are willing to spend appropriately for great stuff. But we have discipline and are tied to the overall budget. Could we put four out next year? Sure. Are we better off doing two? Maybe. There is no magic number.
THR: You launched in late October and have said you'd reach break-even after a year of launch. Are you on track for that?
Greenberg: We said we'd later this year be on a month-to-month-basis break-even and sustain our own operations, and we are still moving toward that schedule.
THR: What else has so far surprised you in running Epix?
Greenberg: On our broadband site for a younger demo, we have a screening room, "Watch with a friend." In my era, you went home and you watched a movie or a fight, and nobody ever said to your friend, "By the way, do you have HBO?" For this younger audience, their living room is the computer. We limit them to three to four friends (who don't have to be pix subscribers) in a screening room and allow them to IM each other as they watch simultaneously. We have had almost 50% of our users experiment with that.
Greenberg: That's what I said. And there is a fairly high completion rate of movies online. We can also use the screening room experience to help provide clients with a marketing opportunity. I have your email, so we can reach out and say, "You enjoyed Kings of Leon, and here is what Epix has coming up."
THR: Have you ever had to restrict or shut down screening room privileges due to overusage?
Greenberg: We have had a few cases where we have actually shut people down -- but less than you would think. We go through this with our clients, and the rule sets may vary from client to client. Overall, we want to be open and accessible as opposed to exclusionary.
THR: When will you roll out mobile services?
Greenberg: Possibly later this year, more than likely next year. For us, it's making sure the security is in place to protect the intellectual property. But today's smart phones and PDAs are like small computers, so it's about facilitating that change.
THR: Will you focus on short or longform content on mobile?
Greenberg: We looked at the content on our broadband site, which is the best parallel, and the top five things that have been utilized there since inception. All the shortform, added-value stuff we do -- analogous to DVD extras -- taken together, that's one of the top five things on our site. That volume of people who want more in-depth, behind-the-scenes information targeted to a younger group surprised us, even though we thought it would be good. Instead of going to Robert Downey Jr. for "Iron Man 2," which is a great interview, we talk to the guy in the food truck or the stunt guy.
THR: What are the other top pieces of content on the broadband service?
Greenberg: Three movies and our Madonna concert. I can't give away too much, but one movie is a comedy that didn't perform as well at the boxoffice, and the other two are top action/adventure/sci-fi films. What surprised us a bit is that comedy plays really well.
THR: Any iPad plans? Do you work with Apple?
Greenberg: Not yet. We deliver everything in Flash, and Apple has made a decision to not permit Flash. It has to have some sort of app. We look at that device as a crossover between my iTouch and my computer. This is their first generation. We'll see where it goes. It's certainly something we'll look into. But portability is important for us. We are working with a number of our clients to authenticate devices within their user base, because we want them to help expand the universe where their subscribers can access content.
THR: Are you developing an app for Apple?
Greenberg: Everybody can develop an app, but the question is what volume would you get. For us, it's about the bigger footprint, and today 97% of computers have some Flash application. It's accessible and we still have DRM in place and it's streamed, not downloaded. iPad may get there. The question now is will they make it easier or harder for people to provide content.
THR: How many more carriage deals do you expect this year and how many do you need?
Greenberg: We want everyone, and we are engaged in conversations with everyone. Some we are in deeper discussions with. But when I started in this business 25 years ago, it was a simpler time. Here is my channel, my rate card and here we go. Now it's more complex. We have been able to package and price differently with every distributor, because we try to meet their needs. And the technology is more complex: Authentication of devices, etc., so we become as much a technology deal as a content deal.
THR: I understand some carriers are putting Epix on a tier, while others have done more standard deals.
Greenberg: We are working with them on how to maximize the value for each client and generate incremental revenue. Some want a tier, some want traditional pay, some like mini-pay, some have wanted a la carte. What we have been trying to give incentives for is the more volume for them and us, the more packaged for them, is better for all of us. We're in a 250-channel environment. We try to incent them economically to do what they do extraordinarily well: package, bundle and distribute. A few come back to us and say we see an opportunity to generate incremental cash by going a la carte -- maybe at a lower or higher price. We have been pretty adaptable as long as it hits certain economics for us as well. So, we have been across the board. Since we have no legacy issues, we don't need to change existing structures.