Earlier this year a new premium cable channel, Epix, was announced as a joint venture between Viacom (Paramount), Lionsgate and MGM. This initiative was formed, at least in part, because of pressure in 2008 by Showtime to lower the fees it paid to these same three movie studios. Initially the new channel’s prospects were met with skepticism, but on Tuesday it was anounced that Verizon would carry Epix on its Fios TV service and as a result today CBS (owner of Showtime) saw its shares fall by as much as 4.9%.

So just how much did Showtime lose when Paramount, Lionsgate and MGM moved their library elsewhere? Looking at the shares of box office revenues by movie studio provides one perspective. Since I had two alternative sources for this information I decided to divide the data into two 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 is the “classic” category is due to the strong libraries of Paramount and MGM, and it will be interesting to see if and how this is utilized 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), and just how much Showtime has lost to Epix.

It’s unclear whether HBO will retain rights for movies from DreamWorks, since it is now owned by Paramount, but for now I am leaving this under HBO’s roof. A major caveat in this analysis is that none of these channels have under contract the entire movie library of these respective studios; only certain titles with very specific timing windows and transmission rights.

Also, as any fan of Dexter, Weeds, or True Blood can tell you, movies are not the only reason to subscribe to these channels. Original productions have become more important in recent years, but I am not sure whether they can be considered the primary reason consumers subscribe to HBO or Showtime.

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.