Starz Entertainment walks out of deal with Netflix

MUMBAI: Premium cable channel Starz Entertainment has ended its content licensing deal with Netflix.

Starz walked out of the deal as it was insistent on tiered pricing and customers to be charged more for access to its content.

Starz’ decision to come out of the talks show just how fragile is the relationship between old and new media providers. The company sees Netflix as a threat to its business because consumers can opt for an $8-a-month unlimited streaming plan rather than pay for cable from where it makes most of its money.

"When the agreement expires on 28 February next year, Starz will cease to distribute its content on the Netflix streaming platform," the company wrote in a statement. "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."
Reportedly Netflix offered Starz more than $300 million a year to keep the content available, but the latter said that it was not enough and insisted that the former’s users needed tiered pricing. Going by that, Starz wanted all Netflix users to pay a premium over and above the $7.99 package to access Starz’ content, but Netflix didn’t agree to it.

Starz had initially signed a 5-year, $30-million-a-year contract in 2008 when Netflix had a few subscribers. Streaming Starz movies and TV shows on Netflix was a way to get the brand out there and potentially interest users in subscribing to Starz.
Now that Netflix has more than 25 million customers and many consumers are opting out of Starz’ platform in favour of online video from Netflix, Hulu and others, the company does not want to encourage even more people to leave cable programming for good.

Starz currently controls the pay-cable rights to movies from Walt Disney Studios and Sony Pictures.

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