Netflix suffers major setback with loss of Starz content

Netflix suffers major setback with loss of Starz content

Summary: Netflix's digital streaming library is about to get significantly smaller now that Starz is pulling its content.

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Just as Netflix completed rolling out a major spike in subscription pricing, customers might be angry to learn that they'll be paying more for less.

The online rental giant has suffered a major setback now that Starz, one of the more significant content contributors to Netflix's Watch Instantly digital streaming library, has decided to pull all of its movies and TV shows early next year.

Starz CEO and president Chris Albrecht wrote the following statement explaining his company's decision:

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.

Examples of Starz content on Netflix right now include Disney's Alice in Wonderland and Prince of Persia. That might not sound like much, but actually Starz is rather important to Netflix as it is the only network that has exclusive rights to first-run Sony and Disney movies on paid-TV in the U.S. Those rights include being able to distribute its programming on Netflix immediately as well, which was a coup for Netflix considering most new releases aren't available on the site until at least 30 days after being released on DVD and Blu-ray.

This isn't to say that Netflix isn't worth paying for anymore. There are certainly plenty of more (and better) digital content providers that have inked deals with the rental service.

Netflix is also trying to spin this in the best way possible, telling Reuters that it will take the money (reportedly between $200 million and $300 million) that it had "earmarked for Starz renewal next year and spend it with other content providers to maintain or even improve the Netflix experience."

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5 comments
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  • RE: Netflix suffers major setback with loss of Starz content

    Netflix isn't worth the money anymore and this just cements that.

    Seriously, their servers bog down in the evening and make it tough to watch anything HD at times.

    Also, their lack of quality first run movies has always been an issue!

    I hope that Red box or Amazon get this Starz Contract.
    slickjim
  • RE: Netflix suffers major setback with loss of Starz content

    The elephant in the room that no one talks about: the cable companies put a lot of pressure on Starz and other premium content providers to drop Netflix and limit availability on Amazon and iTunes as well. The cablecos are feeling the heat from lost premium subscriptions, and they directly blame Netflix for it. They are looking for every angle to attack Netflix, and this is just another one of them.

    While Netflix is raising prices, they still represent a far better value than paying Time Warner or Comcast upwards of $100/month for premium cable channels.
    terry flores
  • RE: Netflix suffers major setback with loss of Starz content

    Well, now I'm really glad I canceled my Netflix service. I still have the TVDevo website's service and get movies and TV for cheaper than what Netflix offers.
    JenniferWeb
  • RE: Netflix suffers major setback with loss of Starz content

    I must be the only person left who loves Netflix. I think "major setback" is rather hyperbolic. Starz is only a small portion of their streaming content. I think the bigger issue is whether other content providers follow suit. Netflix is still their best choice for an outlet for their content. They will find that independent distribution is a big chunk to bite off. Netflix is still a great deal for consumers, even with the recent price increase.
    tradergeorge
  • RE: Netflix suffers major setback with loss of Starz content

    Not that much of what I watch on Netflix is delivered from Starz, as far as I can tell (heaven knows their splashes are annoying enough to be hard not to notice). I wasn't using mail DVD service from Netflix before, so that didn't bother me too much. I will make sure to see Alice in Wonderland one last time. Oh, wait, I actually own *that* one on DVD.
    dogmo1001