As for Studio 3 Partners, Bibb says “it’s not D.O.A., but may be on life support” as the haggling over subscriber pricing, revenue splits, and the timing of new releases continues. The most likely outcome, he believes, is for Verizon or another telco to offer broadband downloads of the channel’s movies, and for the network to become the first major distributor of new feature films online.

The Showtime shake-up has reverberations for the way studio licensing fees are negotiated across the industry. Traditionally, movie studios have placed great importance on the fees generated from licensing movies to pay channels, says Jim Janowitz, an attorney who chairs the entertainment practice at Pryor Cashman in New York.

The licensing landscape had been stable until last spring; HBO has deals with DreamWorks, Fox, Universal, and Warner Bros., and Starz gets movies from Disney, Miramax, TriStar, and Columbia.

But the recent drama highlights a fundamental weakness of the premium television category in general. “It’s not a strong element for cable operators or satellite providers,” says Bob Gessner, president of Massillon Cable TV in Ohio.

“The margins have become very thin, and the fact that consumers can so easily enter and exit makes it tough. Anything you spend on marketing is going to eat up margins for six to eight months.”

In the meantime, a Redstone intervention forcing his corporations to play nice might just be the best possible outcome for Grey, Blank, and their respective companies. Just don’t expect either of them to admit it.