# Starz yanking content from Netflix



## trdrjeff (Dec 3, 2007)

And ceases negotiations for contract extension.


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## Stuart Sweet (Jun 19, 2006)

Press Release:



> ENGLEWOOD, Colo., Sept. 1, 2011 /PRNewswire via COMTEX/ -- Starz, LLC, President and Chief Executive Officer, Chris Albrecht, issued the following statement today regarding the status of affiliation agreement renewal discussions with Netflix.
> 
> "Starz Entertainment has ended contract renewal negotiations with Netflix. When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform. 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. 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."
> 
> ...


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## Stuart Sweet (Jun 19, 2006)

I can't help thinking the timing of this release is not coincidental, since this is the day Netflix's prices go up sharply.


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## trdrjeff (Dec 3, 2007)

> 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.


It'll be hard to keep that $8/mo price point working with content makers/owners taking that stance


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## Davenlr (Sep 16, 2006)

Sounds like just another corporation that wants to extract blood from a turnip.
Netflix subs who also sub to STARZ should cancel STARZ and send Starz an email why they canceled.


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## Nick (Apr 23, 2002)

"Greed is good!"


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## Athlon646464 (Feb 23, 2007)

Before IPTV finally gets sorted out we will see more and more of this. The studios really are very slow to move into the future. They are trying to preserve what they've always had. They are pissed.

It's very interesting to watch. :grin:

IMHO, someday in the not too distant future TV will work like the music business does today. I just hope the innovation isn't sucked out of the content like what has happened with today's music.


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## SayWhat? (Jun 7, 2009)

_This decision is a result of our strategy to protect the premium nature of our _ profit .......


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## Tom Robertson (Nov 15, 2005)

The MSOs couldn't afford to carry Starz if Netflix carried the same content at half the price. It just didn't make sense. Thus Starz had to either double the cost to Netflix (or more) or do this.

Netflix is going to see this again and again...

Cheers,
Tom


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## Stewart Vernon (Jan 7, 2005)

Tom Robertson said:


> The MSOs couldn't afford to carry Starz if Netflix carried the same content at half the price. It just didn't make sense. Thus Starz had to either double the cost to Netflix (or more) or do this.
> 
> Netflix is going to see this again and again...


Exactly...

All the people who think IPTV or Netflix will be free or cheap forever are misguided. IF enough people shift to those sources for content, the price of that content will rise there too... OR people will stop creating entertainment content.

I grant that some cable/satellite offerings seem overpriced at times... but all the people involved in creating the content need to make money too... so I have always seen these IPTV scenarios rising in price at some point to come closer to the other choices.


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## Gloria_Chavez (Aug 11, 2008)

Netflix was paying about 25M a year for Starz content, and it wanted as much as 400M a year after 1Q12, when the contract expires.

Unfortunately for Netflix, Starz provided half of the most popular 30 streaming titles.


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## Stewart Vernon (Jan 7, 2005)

I'm curious to see how Netflix subscribers will paint the "bad guy" here... Netflix or Starz.

When Dish loses a channel over price negotiations... people blame Dish and say they want their channels.

Will Netflix subscribers be mad at Netflix here?


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## Tom Robertson (Nov 15, 2005)

Davenlr said:


> Sounds like just another corporation that wants to extract blood from a turnip.
> Netflix subs who also sub to STARZ should cancel STARZ and send Starz an email why they canceled.


Most of them had cancelled their Starz subscription. That is the whole issue.

Cheers,
Tom


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## Davenlr (Sep 16, 2006)

Tom Robertson said:


> Most of them had cancelled their Starz subscription. That is the whole issue.
> 
> Cheers,
> Tom


So they want to charge a person twice for the same programming eh? Premium streaming fee  Well, I canceled Netflix last month due to their cost increase (for me). Was looking at the Google option, but unfortunately none of my multitude of different boxes/devices will stream it, and Im not buying yet another box. Just more money to give to DirecTv


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## Tom Robertson (Nov 15, 2005)

Basically, if you want access to Starz content, ya gotta pay Starz so they can buy it. "So who you gonna call?"

Cheers,
Tom


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## RunnerFL (Jan 5, 2006)

Stewart Vernon said:


> I'm curious to see how Netflix subscribers will paint the "bad guy" here... Netflix or Starz.


As a Netflix Subscriber I can answer that for you. I will say it's 75% Starz fault and 25% Netflix's fault. It's mostly Starz fault for basically trying to extort money from Netflix but Netflix is also partially at fault for not seeing that this was going to happen and starting streaming at a higher price point. If they had priced streaming at say $15 a month instead of $9 at its inception it would be easier for us customers to see going to $20 a month.


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## Davenlr (Sep 16, 2006)

Tom Robertson said:


> Basically, if you want access to Starz content, ya gotta pay Starz so they can buy it. "So who you gonna call?"
> 
> Cheers,
> Tom


Well, since I dont support greedy corporations any more than I am forced to by lack of other choices, I'll do without Starz, like I do without Extra Innings, Sunday Ticket, smart phone data plans, top tier speed internet, etc. Some of them I have no choice to support, like the $15 I pay for gas each month (drive a 75mpg motorcycle as often as possible), and the grocery stores (gotta eat)


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## Gloria_Chavez (Aug 11, 2008)

My take. I'd bet that Starz wanted $1.50 per subscriber per month, with the sub count updated every quarter. Based on 25M subscribers, Netflix would have had to disburse an annualized 450M, up from today's 25M. 

Who do I blame?

ESPN, for manipulating the DTH and Cable carriers into paying 4.50 per subscriber per month.


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## seern (Jan 13, 2007)

Well, since I have hardly used the Netflix streaming, this does not have much effect on me. I set up my account to be disc only so I don't think my bill will go up much, if any.


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## The Merg (Jun 24, 2007)

"seern" said:


> Well, since I have hardly used the Netflix streaming, this does not have much effect on me. I set up my account to be disc only so I don't think my bill will go up much, if any.


Probably not. 1 disc a month is set to be $7.99/month, which is what it previously was. I had 1 disc and streaming for $9.99/month, but that will now be $15.98/month. I dropped back to streaming only.

- Merg


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## SPACEMAKER (Dec 11, 2007)

Methinks Netflix will take a beating over the next year.


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## Gloria_Chavez (Aug 11, 2008)

SPACEMAKER said:


> Methinks Netflix will take a beating over the next year.


Actually, all the PayTV providers will take a beating this year. Even DirecTv, which had been somewhat insulated from a higher churn, disappointed investors last quarter, with net adds coming in below expectations.

You can't square the circle. Median income continues to stagnate, and PayTV inflation is as high as ever.


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## Tom Robertson (Nov 15, 2005)

Gloria_Chavez said:


> Actually, all the PayTV providers will take a beating this year. Even DirecTv, which had been somewhat insulated from a higher churn, disappointed investors last quarter, with net adds coming in below expectations.
> 
> You can't square the circle. Median income continues to stagnate, and PayTV inflation is as high as ever.


There is beating and then there is a beatdown like few others.

You are right, PayTV MSOs are getting hit hard. Channel providers are demanding money faster than customers are willing to pay, squeezing the MSOs in between.

That said, Netflix has enjoyed very low fees from the studios and channel providers. No one took them seriously initially. Now that they are a serious income stream and are taking money away from the MSO contracts, Netflix is going to be hit with higher fees. Higher percentage increases than the MSOs have been, simply because the fees Netflix pays need to catch up.

Netflix is getting the beating in one year that the MSOs have had the last 4 years. Or more.

Cheers,
Tom


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