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Uncategorized Friday, September 2nd 2011 at 9:32 am

Netflix and Starz Break Up, Netflix Loses a Lot of Content

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Starz has announced that it will not renew its deal with Netflix which provides Netflix subscribers with streaming content from the Starz and Encore brands, which will take effect starting February 2012. Starz not only wanted Netflix to pay a premium price for its content, but it wanted Netflix users to pay more as well, and even though Netflix offered Starz over $300 million, Starz decided to end the deal. Starz was seeking a premium price for its content from both Netflix and Netflix subscribers in order to keep the pricing structure in line with multiplatform video programming distributors, like DirecTV and Time Warner Cable, because the relationship Starz has with those providers is important for Starz.

A person close with the talks between Netflix and Starz claims Netflix was willing pay over ten times more than what they pay now for Walt Disney and Sony Pictures movies, as well as the original programming Starz controls. The Starz catalog represents a pretty large backlog of movies — not particularly the newest films, but popular ones, and losing those and the handful of original series — original series being the main reason I personally use Netflix — seems like quite a blow for Netflix.

A statement from Netflix shows that they aren’t just going to give up on the original and licensed content Starz controls:

Starz has been a great content partner since 2008 and we are thankful for their support.

While we regret their decision to let our agreement lapse next February, we are grateful for the early notice of their decision, which will give us time to license other content before Starz expires.

While Starz was a huge part of viewing on Netflix several years ago because it was some of the only mainstream content Netflix offered, over the years Netflix has spent more and more licensing great TV shows from all four broadcast networks and many cable networks, and we have licensed 1st run movies from Relativity, MGM, Paramount, Lionsgate and others. Because we’ve licensed so much other great content, Starz content is now down to about 8% of domestic Netflix subscribers’ viewing. As we add even more content in Q4, we expect Starz content to naturally drift down to 5-6% of domestic viewing in Q1. We are confident we can take the money we had earmarked for Starz renewal next year, and spend it with other content providers to maintain or even improve the Netflix experience.

We have tremendous respect for the Starz creative team, and we look forward to someday licensing some of their original or licensed content.

So, hopefully all is not lost.

(LA Times, The Next Web via Techmeme)

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  • David Billingsley

    Netflix is what stops a lot of would-be pirates from stealing. If content providers are really losing as much money as they say they are, they should be trying to put everything on Netflix. Then they can better justify charging heavier licensing fee with more content. Yet another win for pirates. Oh well.

  • http://twitter.com/pounddollarsign Michael Corey

    Whelp, guess I’m back to getting my Disney movies through *alternative* sources. I don’t mind paying a reasonable price for media, and Netflix charges what I feel is reasonable for the service provided. DirectTV, Charter, and AT&T all charge 10 times as much for a lesser service. No thanks.

  • Anonymous

    i agree

  • http://twitter.com/RandySpangler Randy Spangler

    Are these people smoking crack? While the ‘left’ side of the political spectrum calls the ‘big business’ people greedy bastards, they show themselves to be even worse, casting aside a steady stream of revenue for an imaginary purchase model. What arrogance and greed.

    Earth to RIAA, ASCAP, Starz, and other creatives: people don’t really want to own your stuff. Really. We just want to watch, listen or read it at our own speed and then move on.

    Sheesh… I guess we will be bailing them out in several years.

  • http://www.facebook.com/people/Smav-Martin/100000265867594 Smav Martin

    I think someone high up in Starz called this deal off. Seems like a bad deal really – even with some content gone I’ll still be using Netflix through its DVD services and regular Starz and HBO is a rip off.

  • Jon Costello

    I think this has more to do with Hulu than anything else. Hulu is getting packed with media from all forms…….and….its free. Maybe Hulu will comply with Starz demands, most likely. All I know is that netflix has taken millions of “internet thieves” offline and on netflix. If all those classic films and content I watch on netflix disappear, than AHOY MATY i’m jumpin on the pirate ship, because whether the 9.99 for the stream and 1 dvd was a gimmick to get people to try their product, IT WAS REASONABLE! But hey soon thanks to the genius’s at work we’ll never have the option to do anything big brother doesn’t want you doing on these bullcrap “cloud” networks. Screw cloud networks!

  • http://www.facebook.com/thetrevoralexander Trevor Alexander

    Well, I can see a lot of new seeders and leechers being born because of this. 

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  • http://pulse.yahoo.com/_Z4CJFSWSF6NJQ2QO56FEBHKHJM K

    I agree – since Netflix lost a couple of my favorite shows from instant play I’ve downgraded my account and started watching them through other means.

  • Francesca M

    Seriously Starz I only watch your stuff because it was on netflix, otherwise I just don’t care. I don’t buy movies anymore. I used to drop tons on anime, but now its like.. meh. I can just go to netflix on disk or on instant. Its too damn convenient.

  • Damon Aldora

    It
    didn’t affect me much to know that Starz wouldn’t have their programming on
    Netflix, as I only watch their stuff because it happened to be there. I don’t
    even have their channels with DISH Network. What did affect me was the price
    increase for the same amount of content with Netflix. If they were going to
    raise the price, I wish they would have at least added more to watch! My
    provider and employer had come out with the Blockbuster Movie
    Pass at about the same
    time as the Netflix price increase so I tried it out. For $10 a month, I get
    DVD exchanges in-store and by mail, streaming to my DVR or computer, 20
    channels on my lineup, plus video games and Blu-rays are included in any
    exchange (which Netflix always charged extra for, and didn’t have games)! I
    like being able to see movies almost a month earlier than Netflix. For now, the
    Blockbuster Movie Pass
    is only available to DISH Network subscribers, but since Blockbuster listens to
    customers, they are working on making the service available for those who don’t
    have a TV service. Blockbuster is a great alternative if you’ve recently
    cancelled Netflix too. As for Starz, don’t count on me subscribing any time
    soon.