Netflix is having a rough day. Not only did the movie rental and subscription streaming service invoke its controversial price hike today, but one of its biggest content providers announced that it has ended contract renewal negotiations.
Starz Entertainment, one of the major sources of newer movie content to Netflix, announced Thursday that its content will stop appearing on Netflix’s streaming platform as of February 28, 2012.
In October 2008, Netflix signed a landmark agreement with Starz to provide online streaming of Starz programming, including Hollywood movies and original programming. That agreement was devised out of a loophole that Netflix CEO Reed Hastings found that would allow Starz to provide its content to Netflix the same way it provides its content to traditional cable companies.
The net result was that content available at any given time on Starz would also be available on Netflix. Most of the newer releases and catalog films from Sony and Disney that are currently available on Netflix Watch Instantly are a result of the partnership with Starz. In fact, earlier this summer, some of Starz’s Sony content was pulled from Netflix because of a contract and usage dispute.
It’s difficult to overstate the importance of the Starz partnership. As Netflix battles competitors such as Hulu, Amazon Instant Video and TV Everywhere, keeping a stable of updated and recent content will become crucial.
Netflix continues to sign content deals with individual studios and content providers, however, the Starz deal was important based on its variety and timeliness.
In a statement, Starz said:
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.
Starz’s decision mimics statements from its competitor, HBO, which has brushed off Netfix’s licensing attempts. Instead, HBO launched its own wildly successful TV Everywhere venture HBO Go. Starz may be attempting to try its own hand at an HBO Go-like solution.
As The Wall Street Journal notes, Netflix stock shares are down nearly 10% in after-hours trading, as a result of both the price hike and the Starz announcement.
We think it would be in Netflix’s best interest to do whatever it can to restart talks with Starz. Losing Disney and Sony films from its library will mean that negotiations will have to take place directly with the studios, and we doubt the studios will offer a better deal than what Starz is peddling. As for Starz, HBO’s success is indeed enviable, but we’re unsure that the network has a brand presence that can encourage users to use a stand-alone digital solution.
We contacted Netflix for comment but had not heard back at press time.
More About: netflix, starz, subscription streamingFor more Media coverage:Follow Mashable Media on TwitterBecome a Fan on FacebookSubscribe to the Media channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Thu, 01 Sep 2011 23:36:36 +0000 at http://mashable.com/2011/09/01/starz-netflix-renewal-talks/
Comments: http://mashable.com/2011/09/01/starz-netflix-renewal-talks/#comments
Starz Entertainment, one of the major sources of newer movie content to Netflix, announced Thursday that its content will stop appearing on Netflix’s streaming platform as of February 28, 2012.
In October 2008, Netflix signed a landmark agreement with Starz to provide online streaming of Starz programming, including Hollywood movies and original programming. That agreement was devised out of a loophole that Netflix CEO Reed Hastings found that would allow Starz to provide its content to Netflix the same way it provides its content to traditional cable companies.
The net result was that content available at any given time on Starz would also be available on Netflix. Most of the newer releases and catalog films from Sony and Disney that are currently available on Netflix Watch Instantly are a result of the partnership with Starz. In fact, earlier this summer, some of Starz’s Sony content was pulled from Netflix because of a contract and usage dispute.
It’s difficult to overstate the importance of the Starz partnership. As Netflix battles competitors such as Hulu, Amazon Instant Video and TV Everywhere, keeping a stable of updated and recent content will become crucial.
Netflix continues to sign content deals with individual studios and content providers, however, the Starz deal was important based on its variety and timeliness.
In a statement, Starz said:
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.
Starz’s decision mimics statements from its competitor, HBO, which has brushed off Netfix’s licensing attempts. Instead, HBO launched its own wildly successful TV Everywhere venture HBO Go. Starz may be attempting to try its own hand at an HBO Go-like solution.
As The Wall Street Journal notes, Netflix stock shares are down nearly 10% in after-hours trading, as a result of both the price hike and the Starz announcement.
We think it would be in Netflix’s best interest to do whatever it can to restart talks with Starz. Losing Disney and Sony films from its library will mean that negotiations will have to take place directly with the studios, and we doubt the studios will offer a better deal than what Starz is peddling. As for Starz, HBO’s success is indeed enviable, but we’re unsure that the network has a brand presence that can encourage users to use a stand-alone digital solution.
We contacted Netflix for comment but had not heard back at press time.
More About: netflix, starz, subscription streamingFor more Media coverage:Follow Mashable Media on TwitterBecome a Fan on FacebookSubscribe to the Media channelDownload our free apps for Android, Mac, iPhone and iPad
Posted on Thu, 01 Sep 2011 23:36:36 +0000 at http://mashable.com/2011/09/01/starz-netflix-renewal-talks/
Comments: http://mashable.com/2011/09/01/starz-netflix-renewal-talks/#comments
