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.

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When Fox announced that it would withhold its TV shows from Hulu and its own website until eight days after their original air date, a lot of people assumed that piracy would increase as a result. Now, TorrentFreak claims to have proof.

The site tracked BitTorrent downloads for two Fox shows — Gordon Ramsay’s Hell’s Kitchen and MasterChef — over the last week, when the delay began. Sure enough, during the first five days, downloads of the latest Hell’s Kitchen episode rose by 114 percent compared to the previous three episodes. Downloads of MasterChef spiked by 189 percent, with the season’s finale likely accounting for higher demand on BitTorrent.

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If you’ve been waiting for an invite to Zediva’s cut-rate streaming video service, it might be time to give up. A federal judge has granted a preliminary injunction against Zediva on grounds of copyright infringement, which should lead to the site’s closure in about one week, CNet’s Greg Sandoval reports.

Zediva launched out of beta last March, with streaming rentals of new releases for $2 per night, or $10 for a 10-pack. It offered new movies before they became available through Netflix and Redbox, and didn’t pay a dime to movie studios. The trick was to let each individual user rent an entire DVD player, along with the disc inside, remotely over the Internet. Zediva argued that it was just like a brick-and-mortar rental store, but with a different delivery method.

Not surprisingly, movie studios disagreed. The Motion Picture Association of America sued Zediva and argued that the service’s rentals were actually performances, entitling studios to licensing fees. U.S. District Judge John Walter concurred, and has given Zediva and the MPAA a week to work out the wording of an injunction.

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ESPN’s app for the Xbox 360 is about to get a lot better, just in time for college football.

The app, which relaunches on August 25 according to Gizmodo, will let users watch two games at once in 720p, with the ability to pause, rewind and replay each game independently. The second viewing window will also be able to show scores from around the league and replays from the game you’re already watching.

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If you’re the lucky enough to own one of six particular Android phones, you may now enjoy Hulu Plus on the go.

An app for Hulu’s premium streaming video service, which costs $8 per month, is now available from the Android Market, but only for the Nexus One, Nexus S, HTC Inspire 4G, Motorola Droid II, Motorola Droid X, and the Motorola Atrix. “We expect to add to the number of Android smartphones and will be making additional device announcements throughout the year,” Rob Wong, Hulu’s director of product management, wrote in a blog post.

The limited launch is reminiscent of Netflix’s partial Android app release last month. At the time, Netflix said that Android lacked a standard set of playback features across all Android devices, although the company previously blamed platform security issues.

Hulu’s not saying why its own Android app rollout begins with only a half-dozen devices. Except for the Nexus One and Nexus S, the devices that Hulu supports are different from the ones that Netflix supports at this time.

I guess that’s an argument for going pure Google. But with Netflix and Hulu both launching in limited fashion, it’s clear that Android needs a standard solution to make media companies happy, especially as the number of Android tablets grow. If they can’t stream media from major sources like Netflix and Hulu, they’ll have a tougher time answer the question of why you’d buy one instead of an iPad.

Netflix is now letting U.S. users dial down the quality of streaming videos to avoid hitting bandwidth caps.

Users can choose from three quality settings by visiting the “Your Account” page on Netflix’s website and looking for the “Manage Video Quality” link. “Good quality” consumes up to 0.3 GB per hour, “Better quality” burns up to 0.7 GB per hour, and “Best quality” consumes up to 1 GB per hour for standard definition or 2.3 GB per hour for HD. The settings apparently apply to computers and televisions.

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Zediva’s streaming movie service may seem too good to be true, but its legal battle with the movie industry will be no joke.

To defend itself from the Motion Picture Association of America, Zediva has retained a trio of laywers from Durie Tangri, a high-profile intellectual property law firm. The team includes Michael Page, who defended music-sharing service Grokster through to its loss in the Supreme Court; Joe Gratz, who won a case that allowed consumers to sell promotional CDs; and Mark Lemley, a Stanford University professor and IP expert.

The Motion Picture Association of America is bringing its own heavyweights from the law firm Munger, Tolles & Olson. The team played a role in bringing down the music-sharing service Limewire, killing the music search engine Seeqpod and nixing RealNetworks’ RealDVD copying software. As PaidContent’s Joe Mullin puts it, this will be “quite the legal battle.”

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It’ll be a while before Netflix’s first original TV series, House of Cards, is ready to stream, but in the meantime, the company may find a new niche by saving TV shows from cancellation.

Following the news that NBC is cancelling The Event, Deadline reported that Netflix considered picking up the serial drama. It wouldn’t be unheard of; in an interview with All Things Digital last week, Netflix CEO Reed Hastings said he could see the company paying networks to keep shows alive, provided they were popular with Netflix streaming subscribers.

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Netflix may be an unstoppable force in the streaming video business, but it’s not without weaknesses. The service’s selection of on-demand movies doesn’t compare to its mail-order DVD catalog, and if you want new releases, you’ll have to look elsewhere.

That’s why services like mSpot Movies are trying to get a piece of the action. Although mSpot Movies isn’t new, the service is now slashing prices in hopes of landing on consumers’ radars.

mSpot rents standalone streaming movies for the same $3.99 as other on-demand services, but the main draw is a “club” package that charges a flat rate per month in exchange for credits, which can be redeemed for on demand movies. Starting at $5 per month for 20 credits, good for up to four movies, the basic service is now half as expensive as it used to be. There’s also an $8 option for 40 credits, and a $16 option for 80 credits. Throw in the promise of new and recent releases, and mSpot seems like a decent deal.

But there are caveats.

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After failing to become a hub for Hollywood content, Google’s YouTube may be spending millions of dollars on its own professional videos, without help from networks.

The Wall Street Journal’s unnamed sources say YouTube is planning a major redesign focused on “channels.” To that end, the company will reportedly spend up to $100 million to commission low-budget, professional content. Roughly 20 of the channels will host several hours of original programming per week, the Journal reports.

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Until now, you’d be forgiven for knowing nothing about Crackle. Sony Pictures’ online video service has kept a low profile by withholding its ad-supported movies and TV shows from most web-connected set-top boxes.

On Tuesday, Sony announced that it’s bringing all that content to the Playstation 3 (via the home screen on the built-in web browser), Sony Blu-ray players, BRAVIA TVs and the Roku set-top box, along with Google TV, which was previously supported. Crackle will become the first web video service to stream ad-supported movies and TV shows to these devices, Sony says.

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Netflix suffered a couple setbacks this week at the hands of Showtime and Starz. According to the Los Angeles Times, Showtime will no longer provide old seasons of “Dexter” and “Californication” for streaming, and Starz will delay streaming episodes of its new series “Camelot” by 90 days. Starz may also withhold movies from Netflix streaming in the future, the LA Times reports.

We’ve been hearing for a while that Hollywood is afraid of Netflix. For $8 per month, the service provides a huge library of on demand movies and TV shows, and has the potential to pull people away from existing revenue streams, such as DVD, video on demand and, in the case of Showtime and Starz, premium subscription television.

But as far as I know, that fear hasn’t produced any tangible effect on Netflix’s streaming service until now. With Showtime and Starz retracting content, we’re seeing the first signs of a Netflix streaming backlash.

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Movie studios are skittish about giving their new releases to bargain rental services like Netflix and Redbox, but that’s not a concern for streaming video startup Zediva.

The service, which moves out of beta today, streams new movie releases for $2 a piece — half the price of new releases from iTunes, Amazon, Vudu and Blockbuster On Demand. You can also purchase a 10-pack of rentals for $10 total.

Zediva shaves down its pricing by cutting movie studios out of the equation. Instead of negotiating streaming rights, the company buys up DVDs at retail and uses place-shifting technology to stream the video out of a Silicon Valley data center. Think Slingbox on a massive scale, but with DVD players instead of cable boxes. (I got a mental image of some guy running around, swapping out all the discs, but Zediva assures me that it uses a carousel mechanism to change movies.)

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Amazon’s protracted battle against Netflix has begun. Starting today, Amazon Prime customers can stream a library of 5,000 movies and television shows at no extra charge.

Prime will continue to cost $79 per year, and still includes unlimited two-day shipping and $3.99 one-day shipping on retail orders. Even if you never buy a single item from Amazon, the Prime video service will save you $17 over Netflix streaming on a yearly basis.

That’s not to say Amazon and Netflix are comparable. Amazon streaming is missing from a few key set-top boxes, including video game consoles and TiVo (TiVo supports Amazon video on demand but not the streaming service, for now at least). As for the iPhone and iPad, Prime support seems unlikely, especially with Apple’s new policy towards subscription services. On the bright side, the service should work on Roku, Google TV and nearly 200 connected Blu-ray players and TVs. Engadget’s Tim Stevens even got some videos running through the Flash player on his first-generation Droid phone.

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As Sony and Microsoft beef up the streaming video selections on their respective video game consoles, Google’s YouTube has been conspicuously absent.

But now, a Google job posting, spotted by Gamasutra, seeks an engineer to “build the next generation game-console-based TV experience with You Tube video content” and “integrate and optimize with distribution channels and devices including all major game platforms.”

In other words, we might someday see a native YouTube app for the Xbox 360, Playstation 3 and maybe even Nintendo’s Wii.

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A rivalry between Hulu and Netflix continues to silently brew. Where the two streaming services once had distinct roles — Hulu for television, Netflix for movies — they are increasingly overlapping.

To that end, Hulu just added 800 movies to its Hulu Plus subscription service, courtesy of Criterion Collection. The high-brow cinema of Orson Welles, Jean-Luc Godard, Federico Fellini and more can now be yours to stream for $8 per month.

The films will be uninterrupted by commercials, which will only roll before the movie starts. The free version of Hulu will get some Criterion Collection movies on a rotating basis, but they will be broken up by ads.

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