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Hollywood partners eye future muscle


Talon

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Hollywood partners eye future muscle

Japan's Sony Corporation looks set to buy Metro-Goldwyn-Mayer (MGM) - Hollywood's last major independent studio - after a deal was agreed in principle.

The deal - reportedly worth $5bn (£2.78bn) - would give Sony access to MGM's extensive film library, including the James Bond series.

It could also have a wide-reaching effect on the television industry, as Sony finalises an agreement with America's largest cable TV operator Comcast.

The Japanese corporation plans to enable Comcast to broadcast Sony films - such as Spider-Man - via its US video-on-demand service.

If Sony succeeds in buying MGM, then its films will also be made available via Comcast - which the firm hopes will tempt consumers away from video and DVD hire outlets, or pay-TV services.

Classics already sold

The MGM studio was founded in 1924 following a merger between Metro Pictures Corporation, Goldwyn Pictures and Louis B Mayer Productions.

Classic MGM films include Gone With The Wind, Ben Hur, The Wizard Of Oz, Doctor Zhivago, How The West Was Won and Mutiny On The Bounty as well as many musicals.

However, Sony will not be able to get its hands on MGM's earliest films. It sold the rights to its pre-1948 catalogue to Ted Turner's Turner Broadcasting in 1986.

"The really great movies like Gone With the Wind and The Wizard of Oz were stripped out of their history three transactions ago," John Higgins, deputy editor of New York's Broadcasting and Cable magazine, told BBC Radio 4's Today programme.

But more recent films - such as Legally Blonde and Die Another Day - are covered by the deal.

Columbia deal

The Japanese company's last Hollywood venture was in 1989, when it bought the Columbia Pictures studio in a deal that was initially regarded as unsuccessful.

"It went down miserably for many many years," said Mr Higgins.

"They wildly misspent money. They trusted completely the wrong Americans and the wrong people in Hollywood."

However Sony recovered to establish itself among the top studios in the US, boosted by the success of its two Spider-Man movies.

This will increase the impact of any agreement it makes with cable operator Comcast.

Video future

"Video-on-demand systems are just getting widespread in the US," said Mr Higgins.

"On many cable systems you can call up a movie as easily as you can call up a web page on the internet.

"That makes video distribution very very easy and could potentially over the years do some very dramatic things to television when you don't need the schedule any more, when you don't need to sit around and wait for the movie channel to show you the movie."

As satellite broadcasters lack the bandwidth required to transmit movies on demand, it is seen as a potentially lucrative new market for cable firms.

A combined Sony and MGM movie catalogue could prove to be a formidable force in Comcast's bid to attract customers.

"What Comcast really wants is to get more recent movies early, as early as they get into the video stores," said Mr Higgins.

"That's where they think the money is."

http://news.bbc.co.uk/1/hi/entertainment/film/3655096.stm

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