Want to See Starz on Netflix? You’ve Got Until February

By  |  Thursday, September 1, 2011 at 7:38 pm

So much for Starz movies on Netflix. Negotiations between the two companies have fallen through, and Starz has announced that it’ll stop providing movies for Netflix’s streaming catalog on February 28, 2012.

Netflix had paid an estimated $30 million for Starz content in 2008, which in hindsight was a steal. Three years ago, Netflix had just started appearing on set-top boxes like the Xbox 360, and Hulu was still getting off the ground. To renew the deal with Starz, Netflix had earmarked $250 million, according to the AP.

UPDATE: Here’s a story by the L.A. Times’ Ben Fritz that says Netflix offered $300 million, but Starz wanted tiered pricing, which would charge subscribers a premium to view its content. Interesting, but not surprising, that Netflix didn’t want to go that route.

Starz said it wants to “protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content.” Media companies have become nervous about¬†Netflix’s grip on the streaming video business, and are hoping to drive up prices by shopping their content around.

This looks like a lose-lose-lose to me. Netflix users obviously lose a whole bunch of content. With less content, Netflix will have a harder time killing the DVD, which according to some pundits was the company’s true motivation for raising prices. Starz, meanwhile, just left up to $300 million on the table, with no guarantee that it’ll make that money back without Netflix.

Still, Netflix CEO Reed Hastings sees the up side: Starz content only accounted for 8 percent of Instant Watch viewing, and could account for 5 percent to 6 percent by year-end, as Netflix licenses more content. “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.”

That promise, of course, assumes other content providers won’t think like Starz and try to take their content elsewhere.

 
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5 Comments For This Post

  1. the guy Says:

    Starz is a channel that sucks even when it’s free

  2. person287 Says:

    I really don't get the possible benefit for starz. By doing this they've effectively lost $300 million and pissed off a lot of customers.
    Netflix did all they could, and I think they seem like they're looking out for the best for the customer.
    Businesses can sometimes be total ****s (guess what that means)!

  3. JohnFen Says:

    Good for Netflix! Tiered pricing would have made the Netflix offering much less compelling. It would have been a bad precedent and the start of the end of the Netflix we all know and love.

  4. JaredNewman Says:

    I'm not categorically opposed to tiered pricing, but there would need to be some sort of tangible benefit attached, like next-day TV shows or HBO original series. Starz's arbitrary catalog of old movies wouldn't cut it.

  5. Riley Says:

    It didn’t affect me much to know that Starz wouldn’t have their programming on Netflix, as I really don’t watch their stuff anyways. What did affect me was the price increase for the same amount of features. If you’re going to raise the price, at least add more! 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 just better! Starz is really pushing their luck. I wont subscribe to them.