I caught this news on Attack of the Show last night. I have never used Netflix but a friend of mine swears by it, dropping the films in the mail the next day and getting four new films three days later. When Netflix started out, it was only $4.99 per month I believe. Now its $8.99 per month and today a newer pricing structure went into effect. By “60% the price for subscribers who want to both rent movies by mail and streaming” has increased.
With the collapse of negotiations, Starz “will remove its content from the Netflix Watch Instantly service when the existing contract expires in February 2012…The issue seems to be simple: Starz thinks it will make more money by making people subscribe to the company’s various cable channels than it will by making another deal with Netflix.”
If this is true I disagree with Starz’s decision. Netflix has a digital platform/streaming infrastructure in place that Starz doesn’t have. It will take years before they have in place what NetFlix has. Look how long in took HBO. They only now have HBO GO after how many years of not being able to stream their content online, via a smartphone, etc.
Regardless, Netflix is certainly taking a hit in this deal. The current Netflix/Starz deal delivered “more than 1,000 recently released movies to Netflix via the pay cabler’s output deals with Walt Disney Studios and Sony Pictures, was key to the emergence of the company as a dominant player in digital movie delivery.” The biggest loser are fans of Starz programming (Spartacus: Vengeance, Spartacus: Blood and Sand, Spartacus: Gods of the Arena, etc.) and its affiliates. “Netflix CEO Reed Hastings minimized the impact of losing top-shelf titles from ‘Wall-E’ to ‘The Social Network,’ noting that they comprised only 8% of its subscribers’ digital viewing.” That might be true but people still enjoyed those films, films they will no longer have access to via Netflix come late February of next year.
Starz programming was a factor in Netflix decimating Blockbuster, pictured in a graph here: How Netflix Destroyed Blockbuster Infographic.
The official press release about Starz/Netflix:
ENGLEWOOD, Colo., Sept. 1, 2011 /PRNewswire/ — 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.”
Do you use any of Netflix’s services? What do you think of the collapse of the business deal between Netflix and Starz?