Earlier this year a new premium cable channel called Epix was announced as a joint venture between Viacom (Paramount), Lionsgate and MGM. This initiative was partly motivated by pressure of Showtime in 2008 to lower the fees it paid to these same three movie studios, who will likely also move their movies away from Showtime in the long run. Initially the new channel’s prospects were met with skepticism but on Tuesday the first MSO carriage agreement was anounced by Verizon who would carry Epix on its Fios TV service. As a result CBS (owner of Showtime) shares fell today by 4.9%.

So just how much does Showtime stand to lose? Looking at the shares of box office revenues by movie studio can provide one perspective. Since I had to use two sources for this information I decided to divide the data into two respective categories: “classics” (movies released between 1970 and 1999) and “recent hits” (movies released between 2000 and 2009).

Combined, Paramount, MGM/UA and Lionsgate took about 17% of the box office revenue between 2000 and 2009, and about 22% between 1970 and 1999, even though Lionsgate didn’t exist then. The group’s strength in the “classic” category is due to the strong libraries of Paramount and MGM, and it will be interesting to see how this is leveraged at Epix.

Notably, Warner Bros. emerged as the leader in both categories, which is a major reason why HBO can be considered to have the strongest movie library of any premium cable channel. Consolidating the current contracts by cable channels indicates just how strong HBO is in this respect (40% share of “classics” and 50% share of recent hits). This chart also demonstrates just how much Showtime has lost to Epix.

It’s unclear whether HBO will retain rights for movies from DreamWorks, since that studio is now owned by Paramount, but for now I am leaving this library under HBO’s roof. A major caveat in this analysis is that I am assuming that each of these channels have contracted the rights of the entire movie library of these respective studios, and contracts are normally issued only with certain titles and with very specific timing windows or transmission rights.

Also, as any fan of Dexter, Weeds, or True Blood can tell you, this comparison of premium movie channels doesn’t account for in-house productions movies which are becoming more important, if not the reason to subscribe to any of these services. I’m sure that this depends greatly on the individual subscriber’s preferences.

In any case I believe this is a beneficial approximate indication of why CBS’ shares dropped so much today, and a good gauge of Epix’ potential in the marketplace. It is obvious that Showtime will have to somehow make up for the loss of these movie libraries, perhaps through contracts with smaller studios, as well as original productions. It will also be interesting to see how Epix develops its value proposition based on its movie library.