Starz ditches Netflix, streaming ends February 2012

Posted by Bradley Wint on 02/09/2011

Starz Entertainment has announced that it will discontinue service with Netflix to distribute digital movie content as of February 28th 2012. As a result, Netflix users won’t be able to have access content from the Sony Pictures and Disney libraries.

According to Starz’s premium content strategy, it seems that they were not able to settle on a final price with Netflix, mainly because Starz wanted more money for their online content. In the last contract, Sony and Disney requested that only a certain quota of users could access their content, and once that limit was reached either a new agreement had to be put in place or have the content removed all together. Netflix was asked to pay at least $300 million from then on to continue streaming the content, but they were unwilling to give in to the higher prices, resulting in Starz content going to disappear next February.

“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.” Chris Albrecht, President and Chief Executive Officer, Starz Entertainment.

In the past Netflix users were able to have access to shows the same time they came out on cable, which pushed the lines of premium content. Obviously Starz would want to give its cable subscribers priority over online streaming agencies, which led to them requesting for Netflix to pay up more cash for its content. They wanted users to feel as if they were paying for a special service, to receive content just as fast as cable subscribers.

This is a big blow for Netflix because Starz provides a decent chuck of today’s biggest movies, and combining that with Netflix’s service price hike, they need to find a new content provider fast or face a gloom future.