Starz says it won't renew Netflix streaming contract, as 1,000 movies hang in the balance

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When the history of Netflix is written in some future book iPad holographic image projected from your eyeballs, today’s date may hold quite a bit of significance. First, today’s the day that Netflix started splitting its streaming and DVD services into two separate plans, thereby raising monthly fees by 60 percent for those who want to keep both services. But today’s also the day that premium cable network Starz Entertainment announced that it’s ending contract renewal negotiations with Netflix. When Starz’ contract expires on Feb. 28 next year, the company will no longer distribute its content — including newly released movies from Sony and Disney — via Netflix streaming.

Talk about a double whammy. Of course, considering that Starz chose to make this announcement on the same day as Netflix’s price hike, there’s a chance that the network is bluffing and attempting to humiliate Netflix into renegotiating. Alternatively, Starz may have decided that it didn’t make sense to offer its content to a company that has essentially become a competitor — why would someone subscribe to Starz if they could watch the network’s content for less money through Netflix? “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,” said Starz president and CEO Chris Albrecht in a statement.

Starz’ asking price could have been a sticking point, too. Last year, Netflix struck a deal with the premium network Epix and gained the streaming rights to movies from Paramount, Lionsgate, and MGM. That agreement was estimated to cost Netflix $1 billion over the course of five years. As a result, it’s likely that Starz was asking for at least $200 million per year from Netflix, compared to the estimated $30 million per year the network currently receives.

Regardless, the losers here may be Netflix’s 25 million users. If Starz and Netflix don’t patch things up by February, Netflix subscribers will lose access to approximately 2,500 titles — 1,000 of which are movies. (In June, Starz pulled its Sony movies off of Netflix streaming, so the real loss here will be the disappearance of Disney films like Toy Story 3 and Alice in Wonderland.)

Of course, Netflix could strike deals with other companies to fill the gap left by Starz. “We are confident we can take the money we had earmarked for [the] Starz renewal next year and spend it with other content providers to maintain or even improve the Netflix experience,” the company said today in a statement. Netflix also took a shot at the true value of Starz’ content: “Because we’ve licensed so much other great content, Starz content is now down to about 8 percent of domestic Netflix subscribers’ viewing.”

I, for one, usually avoided Starz’ offerings on Netflix because the non-HD streaming quality wasn’t up to my absurdly picky standards. But I imagine many Netflix customers enjoyed having the option of watching recent Disney and Sony films. And now, at the precise moment when many folks are considering whether they truly need DVDs and streaming content from Netflix, Starz may have made that decision a little easier.

Read more:
Oh, Netflix alternatives, where art thou?
A (very) bad week for Netflix fans
Netflix splits streaming and DVD into separate plans, meaning many users will pay more

Comments (123 total) Add your comment
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  • Melaswen

    Scrooge would be proud.

    • Serena

      Ebenezer or McDuck?

      • dee123

        LOL! Both!

      • snots mcgee

        McGrundle

        Love how netflix is just slapping their loyal customers in the face with their recent debacles. Bunch of clowns.

      • fnord

        I’m so happy that I sold my shares of Netflix last month. You guys are screwed. Wow.

      • Mou

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      • JFWilder

        Mou – you suck. Who trolls for dates on an entertainment mag site? LOSERS, that’ s who.

      • Shush, JFWilder…

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      • Haha

        Now they’re making good on that threat. Netflix on Thursday cut its subscriber forecast for the current quarter, saying it now expects to end the period with 24 million customers — down from the 25 million the company forecast just a few weeks ago.

  • Sandy

    Greed once again reels it’s ugly head. We are in a recession, Folks. Damn!!!

    • snots mcgee

      Sandy I agree. But I hate your smelly face.

    • LOL

      Reels?

    • forrest

      so how is Dish giving starz away for a year to all subscribers good for ‘preserving the premium brand’ ? Sounds like Stars was just yelling, “Hey look at us – we still exist – Hello everybody!” Now they’re trying to see if anyone will actually BUY thier premium service.

    • doug

      I’m not adding starz to my lineup.. I’m not going to pay for that

  • J.T.

    Most of the Starz movies were not in their O.A.R. anyways.

    • steve

      i agree with the comment that Starz on Netflix is crap because it’s not in HD and the streaming quality is shtty.

      • Blue

        Yes, but whatever will we do without access to Step Up 3 in 3D?

      • Liz Lemon

        I didn’t care about the movies though. It was the Starz TV shows like Spartacus that I watched.
        Crapit! Now I’m going to have to settle for sh*tty bootlegged versions, because there’s no way I’m buying Starz.

  • jaded

    Cancelling Netflix anyways due to their absurd price hike. Not worth it!

    • fnord

      until they can get their act together there is always bittorrent

      • mike

        youre right, stealing is a great alternative

    • JD

      Barely absurd…15 a month is pocket change

      • Just A Guy

        It’s a sad truth that there are many people out there who could really use your pocket change.

    • JB

      Their price hike isn’t absurd. It’s business. You were getting way too much content for nothing, frankly I wondered how they managed for so long without raising prices. Also, if you get dvds & stream, the price hike isn’t a big deal. It’s what 7 bucks more? ooohhh horrible!! If that’s so hard, how about dropping a couple lattes.

      We had three dvds and streaming and it was raising our price by 4 bucks a month. Yeah, that’s so awful.

      People really are being babies about this netflix thing. It goes with the whole ” I want it all and want it for nothing” attitude that people have these days. You all look ridiculous making such a big deal over having to pay for something pretty damn awesome.

      • @JB

        “You were getting way too much content for nothing, ”
        ————————-
        You couldn’t be more wrong on that statement. That wasn’t true even before the price hike and threat to lose what little content they have.

      • Capt. Tightpants

        That is not hte point, JB. They split the plans equally which would be fine if they WERE equal. The streaming portion has, and apparently will be for the near future, supplimentary. The selection was mostly B movies with a few gems here and there. The TV shows they were offering were getting better but it was still no where near the selection afforded by the mail. Until they can show these two services are comparable in selection, it is a rip off. While I kept the mail portion, I could not justify additional money for no additional product.

      • ree

        First I just want to say that I hate the latte analogy. I am a monster without my coffee. That aside, I agree that $7 a month is no biggie for most people, but I don’t agree with your assessment that their streaming service is “pretty damn awesome”. I can see how for someone with kids or without cable, the streaming service would be totally worth it. Personally, I don’t find much – other than some of the Starz content, or TV shows – to be worth it. I am keeping the DVD service for now, just for the convenience of not having to stop at the Redbox on my way home. But, I already have DirecTv, a DVR, On-Demand and HBO. With all of these options, there was no reason for me to keep the streaming service when it doesn’t hold a lot of value to me. I am not saying that the service isn’t worth it for some people, but for me, the value isn’t there.

      • jaded

        Way to stick with the “drop a couple lattes” catchphrase that the CEO of netflix also used. First of all, who the hell drinks lattes? Second of all, Netflix is not worth me missing even one coffee. And Netflix streaming service is not worth the same price as the dvd service. They mostly have movies that were either cool back in the early 90’s or class C movies that no one would even want to watch. But you go ahead and “drop a couple lattes”. I’ll continue to enjoy my coffee and just read a good book instead.

      • mheyize

        Actually, Netflix doesn’t have a choice. The movie industry has charged more to Netflix, plus their streaming database has to be updated so more movies can be placed into streaming, so they really had no choice. Anyway, Netflix is still cheaper. Just sayin’…

      • Tarc

        The bottom line is that the vastly overpaid execs at these companies are trying to suck more cash (TEN TIMES MORE) for the same thing they were just selling. That increase isn’t going to the people that actually make the movies. That increase is outrageous. And considering all of the other options (including the free one), they’d better be careful.

      • googliezoo

        It sucks, but I kinda have to agree. People pay $80/month or more for cable without batting an eye but gripe over Netflix, where most plans are still under $20?

    • mheyize

      Actually, it’s worse over at Blockbuster. You pay your fee, but if you want to stream a movie, it’s an addition $1 per movie. My my Netflix streaming que, I have 80 movies on it. At Netflix, if you get one movie per time, plus streaming it’s $16 dollars a month. You do the math! It’s still cheaper to stay with Netflix than if you went elsewhere.

      • Sue

        I think both companies just made a mistake. I generally only watched the series like Spartacus from Starz – that’s what I’m going to miss — and I can track that down if I need to. I won’t order Starz just for that. If I want a Disney film or Sony film that Starz has that’s not on Netflix, its very likely my local or county library has it … for free (and my system has interlibrary loan too so if one doesn’t, another might). And if I’m just so eager to get a top movie right now, there’s the Redbox in my grocery store. I ended up keeping streaming b/c between my hubby and I, we have a full queue (sp?) but lowered 3 dvds to one dvd at a time. I did that because I noticed that 3 dvds sat around for a long time before being watched but one gets done pretty quickly.

  • Rob

    So does anyone know if this just affects recent movies? I could care less about recent movies because if Ive seen most if them in the past 10 years especially the disney ones. But I’ll be annoyed if it affects all movies from other companies older than 10 years.

    • John Young

      About one-third of Starz’ 1,000 movies on Netflix are recent releases.

      • Tom

        Basically, if you have netflix stock or you are a customer, you are out of luck now. You picked the wrong horse.

  • Rob

    So does anyone know if this just affects recent movies? I could care less about recent movies because if Ive seen most if them in the past 10 years especially the disney ones. But I’ll be annoyed if it Would affects all movies from other companies older than 10 years.

  • Jacob

    I don’t get Starz’ logic. They’re losing out on a payday for subscribers they probably would never have had in the first place. It’s not like Netflix was making up the difference; they were adding to it. Do they honestly believe people are now gonna be like “Oh no! No more Starz Play on Netflix? I better up and subscribe then!” Not a chance. Starz was an added bonus to Netflix Instant Watch, and most are either just going to cancel, or not give a crap. That’s the reality.

    • Jenn

      Exactly! I only started watching Starz shows like Spartacus because “Hey! Neato!” – they were streaming the day after airing on Starz. I thought that was a good model, showing they were looking into the future. Apparently not.

      If Starz doesn’t stream on Netflix, then I just won’t watch Starz.

    • Danielle

      My cable company charges $15 a month if I want Starz with them. You can bet I dont like Spartecus or Torchwood enough for $15

  • Emma – Chicago

    I’m glad I canceled Netflix and switched to Redbox for DVDs. For Movies and TV show Streaming, I switched to TVDevo . This is working out well for me.

    • Becky

      Nice to see Redbox employees giving out “advice”.

      • @Becky

        Wait TVDevo is part ot the Redox company? Moron.
        Perhaps she was giving, oh I don’t know, her stance on the whole situation. There are other ways to get your TV and movies you know.

  • Imma Gee Zure

    Well, Netfux better come up with something besides 2star rated movies and 90 year old TV shows if they think they can screw everybody with a 60% fee hike.
    The little grocery store in BF Arkansas gets more relevant new releases than Netfux ..and that isn’t a kudo to either one.
    It is the rural people with no options that are hurt the most. 1…they are already isolated from civilization. 2 …wireless, digital and almost all other infrastructure is non-existent. 3 …its a 60 mile round trip to use wally’s red box .
    boo hiss shame on flix

    • Jason S.

      Well I’m guessing it is much cheaper to live in a rural area then a city so cough up the six extra bucks.

      • Julie

        It’s cheaper to live rurally? Sure gas prices are so low, that it’s no big deal to drive 45 mins to get to your place of employment….Rural living is not cheap any more.

      • m

        I lived in Baltimore for 7 years, and I just moved to a rural area last year (about an hour from both Baltimore and DC), and I can tell you that the only expense that I have that decreased was my car insurance. Everything else went up. Even the gas is more expensive by my house than it is closer to the city. But I will say, if you live in BF Arkansas, I font know what your options are. It might be a better deal to keep Netflix, or maybe drop the streaming and get the 2 dvd plan for $10.

  • GREG

    I can see both points of view. It is CONTENT that made Netflix what it was. If it weren’t for distributors and content providers, Netflix would never be what it is today. Suddenly Netflix raises rates. You can argue the streaming only deal is only $7.99.. but wasn’t it $4.99 for Starz Only? Now all of a sudden the content providers want a bigger piece of the pie. I hate corporate greed, and think its the most corrupt industry in America, but I think its wrong for Netflix to drastically raise rates, and yet feel it is not necessary to pay content providers a piece of it..

  • Tygor1

    You know, I thought that when they decided to raise their prices, that I would go with one or the other. So I went with the streaming. But if they remove that, then what’s the point of spending $7.99 on things that I can already see on TV, or better yet, see on another channel? If they, the greedy, corporate scum (Greedos, for short) don’t care about people, then why should we stay with them? Off with their heads, I say!

  • Airdomenic

    I’m still waiting for them to fix their streaming problem that cuts off the last 15 seconds of some movies. Usually it’s just the credits (which I do watch) but the end of “M” was missing the final lines of dialogue.

    • orville

      The last 20 minutes of The French Lieutenant’s Woman was cut off and they hadn’t fixed it before it became unavailable on streaming. I called to complain, but got absolutely nowhere.

      • James S.

        Really? I watched TFLW and had no issues. Movie played fine.

      • Tom

        I tried to use Netflix on my brand new linux laptop, and it wouldn’t work. Netflix really sucks.

  • GREG

    I also think Netflix is screwed, if they give in to Starz, a half dozen other content providers are going to threaten to pull the plug.

    I think too many customers who already left aren’t going to come back no matter what.. You are with a company for 10+ years, they suddenly raise rates 60% without an explanation.. I know we are only talking about a few bucks a month, but If I raised my rates 60% to some of my loyal customers who I credit for establishing my business, they would kick me out the door.. I would feel so guilty, I wouldn’t sleep at night.

    • Jason S.

      Yeah. The should have grandfathered early customers. What I think they’re main mistake is though is that they think their streaming is good enough to stand on it’s own when it isn’t. It was a nice extra to watch some moviewyou haven’t seen and some TV shows on streaming while waiting for DVDs. Together with mailed DVD’s it is a GREAT service. The streaming is what made it better then Blockbuster and made people forget about them not getting new releases for 30 days. BY taking away the streaming from the DVD package and charging for it separately people will go to Blockbuster and Redbox for DVD’s. They make keep streaming for ahile because $7.99 is not a bad price point. But what happens next year when they raise it to $10.99. Everyone will cancel and they will have lost their original DVD customer base.

      • Wait… where’s a Blockbuster?

        I don’t know about the rest of you, but all the Blockbusters around me for MILES AND MILES have been gone for months now.

      • orville

        All of ours (along with every other video store in the area) have been gone for a couple of years now. All we have is Blockbuster Express kiosks (many of which malfunction), Redboxes, and a new home-grown video store that is kind of sketchy.

      • SJ

        I am keeping netflix but I agree, it would have made sense to raise rates only if streaming content was simultaneously improved. If they had renewed with Starz and got other new contracts available for streaming, then by all means, jack up the price a bit.

        I’m going down to 1 disc at a time and keeping streaming, so it’s essentially what I paid before the hike. I don’t watch as many movies anymore, I’m mostly DVRing my own shows from cable and watching tv series on instant play.

      • forrest

        should be interesting to see the shift in streaming and content now that Dish has bought out Blockbuster.

    • myprettypony

      I’m cancelling it once I finish True Blood. I guess I’ll buy this season’s DVD or get HBO when they re-air it

      • m

        Depending on your provider, when you subscribe to HBO you get access to HBO GO, and you will have access to stream all HBO content.

      • orville

        And depending on your cable company, if you subscribe to a premium channel, you can usually get the shows on that channel On Demand. I have Comcast and they usually have the whole season (and sometimes past seasons) available through their On Demand service. Some shows that have ended too, like Deadwood, Six Feet Under, etc. It’s one of the only really good things about Comcast.

      • kel

        I watch this season’s True Blood episodes on tvduck.com. Check it out!

  • Johnification

    I read this as I was watching Party Down in Netflix….nooooo! I mean, I’ll finish the series, but I love rewatching episodes!

    • LW

      I KNOW!!! i love rewatching them too. i guess that gives me the excuse to buy the series on dvd.

  • Escapade

    Now I’m gonna have to buy the DVD because every once in a while I need a shot of Steve Guttenberg’s Birthday…

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