Posts Tagged ‘Starz’

Starz Pulls The Plug On Netflix Streaming

Monday, September 12th, 2011

Starz Leaves Talks To Renew Licensing Contract With Netflix

Netflix To Lose Streaming Rights To Disney, Sony Pictures, And More

This month, Netflix is implementing the much-talked-about price hikes for customers who want to use both company’s original disc-by-mail service and its increasingly popular online-streaming service, which until recently was offered as a free bonus to millions of Netflix subscribers. It has been widely reported that the price increases were put into action to help cover the skyrocketing licensing fees that Netflix must pay the studios in order to stream digital video transfers of their movies and TV shows. But now Netflix is losing one of the biggest contributors to its online video arsenal.

Starz, the premium movie channel that owns the streaming rights for movies from several major studios including Disney and Sony Pictures, has recently announced that it has pulled out of talks to renew its licensing agreement with Netflix. When the current contact expires on February 28th of next year, Netflix will be forced to remove a substantial portion of its online content from the “Watch Instantly” library. According to Starz, the decision is part of a strategy to “protect the premium nature” of the Starz brand, and to preserve “the appropriate pricing and packaging of (its) exclusive and highly valuable content.” Starz cited both its studio rights and its “growing original programming presence” as assets that needed protecting from potential value loss, and stated that the network remains “in an excellent position to evaluate new opportunities and expand its overall business.”

Despite the clarity of Starz’s statement, some analysts suggest that the decision to end contract renewal negotiations with Netflix is merely a bargaining chip for Starz. It may be too early to determine whether Starz actually intends to break ties with Netflix, but it certainly isn’t the first time that Netflix has seen a content supplier threaten to pull the plug on its digital video transfers, only to sign another licensing contract with a high price tag attached. Starz claims to be in an “excellent position” to pursue other opportunities, but many analysts believe that neither company can survive in this market without the other, and that Netflix subscribers who are afraid of losing access to movies like “Tangled” and original shows like “Camelot” and “Torchwood” shouldn’t panic just yet. There is however one bit of wisdom that we can take from this situation: it certainly is getting tougher for Netflix to secure licensing rights for streaming content.