Viacom launches premium channel

Paramount's Cloverfield will be one of the films available

Viacom, owner of Paramount Pictures, is launching a pay-TV channel and on-demand service with two other major studios to screen their productions.

The studios - Paramount, MGM and Lionsgate - will provide pay-TV viewers with exclusive screenings of movies such as Cloverfield and Iron Man.

The joint venture will take on CBS's Showtime Networks, which the three filmmakers used to have contracts with.

However, US households are watching fewer feature films, analysts said.

According to market data firm Nielsen, the numbers of households watching films first shown in the cinema at home have fallen 80% since 2001.

Many viewers have already seen the movies on DVD, downloaded them via their PC or an on-demand service before they become available on pay-TV.

Viacom President Philippe Dauman hopes the new premium channel can exploit that trend.

"We can provide a lot more ways to provide what consumers want, whether it's broadband opportunities, maximizing video-on-demand opportunities and high definition," he said.

The channel will also show TV series and is expected to launch in the Autumn of 2009.

Viacom will take the largest share of the new joint venture, but no further financial details were released.