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Why Did Starz Drop Out of Netflix?

Discussion in 'More News from Your Google TV News Team' started by Rickaren, Sep 2, 2011.

  1. Rickaren

    Rickaren New Member Staff Member

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    Netflix offered $300 million-plus, but Starz wanted higher consumer prices
    09/01/2011


    [​IMG]
    Starz didn't just want Netflix to pay more money for its content. It wanted Netflix consumers to pay more too.
    Netflix offered Starz more than $300 million per year to renew their agreement, but the pay cable channel was insistent on so-called tiered pricing, according to people close to the negotiations but not authorized to speak on the record. Tiered pricing would require Netflix subscribers who want movies and television shows from Starz and other premium providers to pay more than the standard $8 per month.


    That demand was apparently a key sticking point in talks that fell apart Thursday, meaning the two companies' deal, which began in 2008, will expire at the end of February.


    Starz wanted Netflix to charge a premium price for its content in order to put the popular online video service more in line with cable and satellite providers. Protecting relationships with multiplatform video programming distributors (MVPDs) like DirecTV and Time Warner Cable is critical to Starz. The MVPDs are wary of Netflix because they fear customers will "cut the cord" if enough fresh content is available online at a lower price.


    Netflix was apparently unwilling to introduce higher prices for access to certain content on its streaming service. The company's chief content officer Ted Sarandos, who led negotiations, declined to comment beyond an official statement that did not address the issue.


    However, the company was willing to pay a very high price for access to the movies from Walt Disney Pictures and Sony Pictures that Starz controls, as well as original series like "Camelot." It offered more than $300 million annually, a person close to the talks said, more than 10 times the rate that it currently pays.


    Netflix must determine how to maintain its rip-roaring subscriber growth despite the impending loss of popular first-run movies like "Tangled" and "The Karate Kid." Starz, meanwhile, must find a way to make up for the $300 million-plus that it gave up -- with its traditional television business or a deal with another digital subscription video provider such as Amazon.com.
    SOURCE
     
  2. Rickaren

    Rickaren New Member Staff Member

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    Netflix: More subscribers than any cable company, growing the fastest, but still not Starz’ best friend

    Friday, 2 September 2011




    One of the reasons that Netflix and Starz couldn’t reach an agreement over extending their relationship is because Starz reportedly wanted Netflix to charge its subscribers more to access Starz content — via a premium tier — the way Starz’ cable partners do.
    There are many reasons why Starz might have demanded that, from wanting to position itself as a premium video provider (like HBO; good luck with that) to wanting to show its cable and satellite partners that they are still Starz’ priority. Given that cable, satellite, and telco TV providers still represent the vast majority of video connections in the U.S., that might not be a bad idea, at least for now.



    [​IMG]
    With 25 million subscribers, Netflix has more video subscribers than any single cable or satellite company. And having grown its customer base by almost 10 million over the past year, it’s growing much faster than any of them.


    But combined, all the cable, satellite, and telco TV providers that I tracked still have about 80 million video subscribers, up almost 1 million from last year. Which means, for now, they may be in a better position to make Starz money than Netflix is — even if Netflix reportedly offered more than $300 million per year for Starz content.


    Looking forward, it’s possible that Netflix will continue growing like crazy, and could eventually be a better potential partner for Starz than the slow-moving cable companies.


    But Starz may also want to try reaching consumers directly someday. Thanks to platforms like the iPad and iOS, it’s never been easier for content owners to get their video in consumers’ hands — and even bill them — without going through a distributor or aggregator like Netflix or Comcast. (Starz is probably jealously looking at the HBO GO app, for instance, and wondering how it can do similar or better.)


    Presumably, this is also eventually going to be possible on TVs, via connected TV platforms like Google TV, the Xbox and Playstation, and whatever Apple is cooking up. And then it gets really interesting for content owners like Starz.

    SOURCE
     
  3. Rickaren

    Rickaren New Member Staff Member

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    Dish Network to Introduce Blockbuster Streaming Movie Service

    Fri, Sep 2 2011


    Dish Network Corp., which owns Blockbuster, is planning a streaming-movie service, Bloomberg is reporting.


    A Dish network spokesman told TheWrap that the company is not commenting on the report.

    According to Bloomberg, Dish hasn't set a price for its service.


    But it'll be designed to compete with Netflix, which, beginning this month, is charging consumers one set of fees for mail order movies and another for streaming videos.



    And on Thursday, Netflix lost its deal with Starz to stream movies from Sony and Disney.


    Dish, which offers a Starz movie package on its satellite TV channel, is expected to offer Starz products on its service, according to Bloomberg.

    In April, Dish bought the ailing Blockbuster movie chain for $320 million. Since then, it has offered cross-promotions with Blockbuster.


    Blockbuster lets customers buy videos on demand but does not currently have a subscription streaming service.


    SOURCE
     
  4. stuberman

    stuberman Member

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    "But it'll be designed to compete with Netflix,"

    Hmmm... only 10 years late
     
  5. eferz

    eferz Well-Known Member

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    Well, to be fair, Dish Network wouldn't / couldn't have purchased Blockbuster 10 years ago.
     
  6. stuberman

    stuberman Member

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    True, but there is a lot of catching up to do... I would have to be trying to play catch up (as Google says, 'following the taillights')
     
  7. Rickaren

    Rickaren New Member Staff Member

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    Starz Dumps Netflix for Blockbuster Streaming Subs

    URL: Starz Dumps Netflix for Blockbuster Streaming Subs

    September 4, 2011

    [​IMG]Thursday brought reports that negotiations between Starz Entertainment and Netflix had deteriorated to the point that Starz decided not to renew its contract when the current one ends February 2012. Insiders claim that both sides disagreed over the value of Starz content - which includes movies from Walt Disney's numerous studios - and how it should be sold to Netflix customers.


    "What created (Netflix's success in streaming) is frankly, initially getting Starz, getting that content, which got you more subscribers, which allowed you to buy more content," said Janney Montgomery Scott analyst Tony Wible. "The virtuous cycle that has made Netflix what it is could work against it. If you lose content, you lose subscribers; ... it could be a downward spiral from here."


    The news couldn't come at a worse time for Netflix as it begins to raise the prices for most of its 25 million customers this month. But things got a little darker for the popular video streaming service on Friday with reports that Blockbuster will launch its own streaming service next month. If that wasn't depressing enough, Starz will also reportedly be one of Blockbuster's content providers.


    Ouch.


    According to reports, Blockbuster parent company Dish Network Corp is set to launch the video streaming service in October. The timing is on purpose according to insiders, intent to lure away Netflix customers discouraged over the 60-percent price hike for those who want both streaming and disc-based content ($15.98). So far, Dish Network hasn't revealed pricing for its Blockbuster streaming service.


    Currently Blockbuster already provides a video streaming service by way of Blockbuster On Demand which offers single rentals and full movie purchases that can be streamed to numerous devices. The new streaming service would compliment what's already available, allowing customers to pay a flat, monthly subscription fee for an "all you can eat" video buffet.


    Bloomberg reports that the new Blockbuster subscription service may include on-demand Blockbuster movies that Dish satellite customers can watch on television sets. The new service is also expected to be offered in conjunction with Blockbuster's current mail-in order and in-store DVD rentals.


    For consumers who have used Blockebuster for numerous years, the news seemingly indicates that the long-standing video rental service may finally be rising from its ashes. The company was the #1 rental service before Netflix arrived, seemingly building brick-and-mortar stores on every corner. But once the movie watching public caught on to Netflix's unique approach, business suddenly went south for the former rental giant.


    Eventually Dish Network swooped in and acquired most of Blockbuster's assets for $320 million back in April 2011. Since then, numerous stores have re-opened, and the chain once known for renting out video tapes and DVDs was suddenly finding new life in the streaming and mail-in video rental business. Now with a streaming subscription service set to launch next month, the former video heavyweight champion seems properly outfitted to take on the current reigning champ.


    That said, the new service may even give Dish Network itself a little boost. "This ought to begin changing the way investors think about Dish," said Ryan Vineyard, an analyst at RBC Capital Markets in New York. "It goes from being an old-school pay-TV company to launching what could be a really high-growth business."
     
    Last edited: Sep 5, 2011
  8. eferz

    eferz Well-Known Member

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    Awesome! Now, if only Dish Network can secure Hulu and combine the two models into a single implementation then I can get rid of Netflix. Plus with Dish Network being a part of Echostar (the largest channel provider in the world), content owners should be less worried about their profits being shaved away from "cord cutters". This would be a win-win if Blockbuster can come up with a reasonable pricing schedule.
     
  9. towboy123

    towboy123 New Member

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    Charlie is trying hard to stay ahead of the competition love me some dish network

    Sent from my DROIDX using Tapatalk
    Rocking Honeycomb on GTV
     

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