At the top end, a recent blockbuster may command as much as $15m to $20m for the basic cable window, which comes after premium pay. Though those new-release values have been stable for some time, the Godfather deal suggests there may be a valuation revival coming for catalog classics. In their ongoing efforts to push up carriage fees, cable networks are offering to stock operators' free video-on-demand (FVoD) services with substantial amounts of content. Having the Godfather series behind the 'AMC on Demand' button will strengthen AMC's negotiating hand.

No hit theatrical goes unclaimed, because basic cable networks have to fill their vast 24/7 schedules. With high production values and top stars, top theatricals are a guaranteed ratings winner. The value of older catalog had waned before FVoD came along, because few have 'must tune in' value in a scheduled world.

Networks have also complained that the ongoing sales of such titles at retail over recent decades have eroded ratings. And, indeed, some classics from the '60s, '70s and '80s continue to produce significant revenue at retail-$10m or more in some cases. Of course, putting titles like The Godfather on heavy rotation on the FVoD tier puts that at risk, a calculation that's undoubtedly driving studio requirements when cutting these licensing deals.

Films are typically licensed in small packages via individually-negotiated deals, unlike the premium pay window where each major studio feeds all its big movies to a single buyer under multi-year output deals. A blockbuster is usually used as a locomotive to pull off a package sale that includes some lesser movies, although that's not the case with the Godfather deal. AMC is betting the memorable scenes from the Corleone crime-family epic will give pause to channel surfers and further its goal of projecting a premium TV atmosphere on what is its basic cable network.

As cable networks become more aggressive in securing expensive first-run TV show content their interest in catalog classics will likely increase. As we explored in US Cable Network Intelligence's latest Insight report Cable networks: leading television out of the recession, cable networks are exploiting their rapidly growing dual revenue streams from advertising and carriage fees to spend heavily on licensing more sports rights and licensing original series. AMC may have a more obvious need for American movie classics (the network's launch name) than most basic networks, but others may well find that catalog titles of obvious interest to their core demographic targets are worth more in an FVOD world than they used to be.