Netflix just lost a significant source of recently released movies. Premium cable network Starz Entertainment declared negotiations were over and it would not renew the two companies’ existing licensing deal when it expires on Feb. 28, 2012. This will prevent Netflix from offering its streaming service customers any movies from Walt Disney Studios and Sony Pictures until after the pay-TV window.
Netflix undoubtedly will find this lack of recent titles awkward to explain to customers of its streaming service, who just absorbed a rate increase.
“This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content,” Starz said in a statement. “With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business.”
Starz thus joins HBO, which has refused to partner with Netflix for movies from 20th Century Fox, Universal Pictures and Warner Bros. Netflix’s deal with cable channel Epix remains unchanged, meaning the streaming service will still be able to offer recent movies from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer.
Netflix responded that Starz wouldn’t be missed much. “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 first-run movies from Relativity, MGM, Paramount, Lionsgate and others,” the company said in a statement. “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.”
According to Netflix, Starz content had dropped to about 8 percent of domestic Netflix subscribers’ viewing, and the company’s projections indicated that downward trend would continue to 6 percent or less in the first quarter of 2012.
Netflix stock fell more than 8 percent in after-hours trading on the news, while Starz parent company Liberty Media Corp.’s stock remained unchanged.
Statement from Starz – http://starz.mediaroom.com/index.php?s=43&item=1069
Los Angeles Times – http://tinyurl.com/3ed4fzg
AllThingsD – http://tinyurl.com/3pm5dxf
Photo by flickr user _taro_, used under Creative Commons license