Online Video Steven Kippel on 08 Sep 2011

Netflix lets Starz walk away

Netflix lets Starz walk away

After months of negotiation, Starz has decided to walk away from Netflix at the end of the year, taking thousands of instant streaming movies and TV programs with them. Starz licensed many of the higher profile Sony and Disney movies to Netflix for streaming, including Pixar titles.

I’d like to think Netflix has plans for the future to keep their subscribers and even gain some more, especially in the face of growing competition, so I’m holding my breath in hopes they have a card they haven’t played yet. To let a big fish like Starz walk away without a backup plan is certainly a bad move.

Time will tell if Netflix didn’t try hard enough. There are rumors of Netflix getting more content directly from the source instead of a third-party like Starz. But it’s also possible Starz is trying to be even more like HBO and demanding anyone who has access to their content pays subscriber fees. This might be more realistic based on the statement from Starz about maintaining “premium” content.

As far as HBO is concerned, they said they’re willing to stream their content, but only if every subscriber pays $20 per month. Certainly Netflix wants to keep their subscriber fees low, and adding $20 for HBO and $20 for Starz would make their subscriber accounts nearly as much as basic cable.

Maybe Netflix should use premium tier pricing like the cable companies in order to maintain their leadership role, and take on the cable companies. If Netflix could stream HBO or Starz video on demand for an additional $20 per month, it’s equivalent to adding it to your cable bill. Cable doesn’t provide this on demand, but they would probably maintain first-run status.

I’m just “thinking out loud” right now, but this little impasse between Starz and Netflix will certainly put a damper on what content I personally can watch on Netflix. Many of the movies I’ve watched this year have started with the Starz logo.

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