& cplSiteName &

Did Starz Reject $300M Netflix Offer?

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
9/2/2011
50%
50%

Fallout from the bombshell Starz Entertainment LLC lobbed at Netflix Inc. (Nasdaq: NFLX) on Thursday afternoon leads off Friday's extended cable news roundup. (See Netflix, Starz on the Outs .)

  • Netflix offered more than US$300 million to renew its deal with Starz, but the premium programmer balked because it demanded that the video streamer package Starz content with a premium-priced tier, reports The Los Angeles Times. Netflix didn't go for it, but the paper said Starz wanted that condition to protect its relationships (and pricing) with MSOs, telcos and satellite service providers that are fearful that baking Starz into the current Netflix tiers, which start at $8 per month, could leave them vulnerable to more cord-cutting.

  • Netflix hasn't issued a statement about the unraveling with Starz as of this writing, but Netflix CEO Reed Hastings shrugged off the effects in comments given to Business Insider. Hastings said Starz content currently represents 8 percent of domestic Netflix subscriber viewing and expects that to dip to five to six percent in the first quarter of 2012 as it adds a "huge" amount of content before the end of 2011.

  • Jefferies & Company Inc. Managing Director Youssef Squali isn't as confident that Netflix can fill the gap and keep churn in check, pointing out in a note issued this morning that Starz provided Netflix with movies from Sony and Disney representing up to 30 percent of Hollywood studio output. Netflix could try to score Sony and Disney movie deals on its own, but it'll have to settle for later release windows, he wrote.

  • The news on Netflix didn't help out its stock. It was down $19.79 (8.48 percent) to $213.48 each in early trading Friday.

  • A U.S. district judge approved Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s acquisition of NBCUniversal LLC on Thursday with conditions that give the court oversight on the deal for two more years. The court will be keeping a particularly close eye on how the MSO doles out rights for NBCU content to online video distributors. Here's the full order. (See Comcast-NBCU Rules to Frustrate OTT Players.)

  • Mediacom Communications Corp. Chairman Rocco Commisso blasted the Federal Communications Commission (FCC) Chairman Julius Genachowski for not moving quickly enough on its pledge to reform retrans rules. The MSO's in a heated stand-off with LIN Media, with LIN-owned broadcast TV stations still blacked out in several Mediacom markets. (See FCC Reexamines Retrans Rules.)

  • So, maybe Google (Nasdaq: GOOG) does have a strategy for Motorola Mobility LLC 's cable technology assets after all. Company Chairman Eric Schmidt said Moto's product line also formed part of its allure. "We did [the deal] for more than just patents," he said in this Bloomberg report. "The Motorola team has some amazing products." (See Cover Sheet: Google to Acquire Moto Mobility.)

  • Which over-the-top box -- the Apple TV, Roku 2 or Boxee Box -- is the best for the average consumer? According to The Wall Street Journal's Walter Mossberg, his vote went to Apple Inc. (Nasdaq: AAPL)'s latest entry, with Roku Inc. a close second. He recommends Apple TV for people who use iTunes a lot, but was particularly keen on the Roku 2's simplicity and video quality. He liked the vast library of the pricier Boxee box, but found it much more complex and therefore better suited to tech geeks.

    — Jeff Baumgartner, Site Editor, Light Reading Cable



    (2)  | 
    Comment  | 
    Print  | 
  • Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
    Cooper10
    50%
    50%
    Cooper10,
    User Rank: Light Beer
    12/5/2012 | 4:54:51 PM
    re: Did Starz Reject $300M Netflix Offer?


    If Netflix offered $300M per year, that would enable 22M Netflix subs (Netflix estimate of their streaming subs after rate increase) to stream Starz content.  Doing the math, that works out to a little over $1 per sub per month.  Pay TV license fees for Starz are still 3X to 4X what Netflix offered on a per sub basis.  Would be surprised if Netflix does not begin to see more demands on content renewals be based on per sub fees, vs. flat rate.

    shadow66
    50%
    50%
    shadow66,
    User Rank: Light Beer
    12/5/2012 | 4:54:47 PM
    re: Did Starz Reject $300M Netflix Offer?


    why Netflix want to stick a flat price and rejected a  premium price tier?  as long as the price is better than cable and other tradtional channels, it's also increase NetFlix's revenue and profit.


     


     

    From The Founder
    Light Reading today starts a new voyage as part of a larger Enterprise.
    Flash Poll
    Live Streaming Video
    Charting the CSP's Future
    Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
    LRTV Interviews
    No Stopping Cable's Ethernet Gains

    12|9|16   |     |   (0) comments


    Vertical Systems' Erin Dunne explains why US cable operators, which now command a record-high 26% of the Ethernet market, will keep boosting their share.
    LRTV Interviews
    Fixing IoT Security Is an Ecosystem Challenge

    12|9|16   |   05:34   |   (1) comment


    Level 3 Communications' Chief Security Officer Dale Drew says service providers, manufacturers and even consumers must combine to halt massive DDoS attacks using IoT devices in botnets. The solution he has in mind includes reputation-based routing by the service provider but also more secure endpoint devices and greater consumer awareness.
    LRTV Interviews
    Cox Clears $2B in Business Revenue

    12|8|16   |     |   (0) comments


    Cox's Jeff Breaux discusses how the third-largest US MSO will reach the $2 billion revenue mark this year and plans to hit $3 billion by 2021
    LRTV Interviews
    Can Cable Climb Upmarket?

    12|7|16   |     |   (0) comments


    Carol Wilson and Alan Breznick assess cable's prospects for winning more enterprises in a landscape rocked by corporate M&A activity.
    Women in Comms Introduction Videos
    TalkTalk Exec: Find Your North Star at Work

    12|7|16   |   3:38   |   (1) comment


    Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
    LRTV Interviews
    Verizon: Beware Unknown Unknowns

    12|7|16   |   04:58   |   (0) comments


    Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
    LRTV Interviews
    ETSI's CTO Talks NFV, 5G & NGP

    12|5|16   |   09:45   |   (0) comments


    Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
    Women in Comms Introduction Videos
    Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

    11|30|16   |   4:10   |   (2) comments


    Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
    LRTV Custom TV
    We Can Make the World More Sustainable

    11|29|16   |     |   (0) comments


    GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
    LRTV Custom TV
    Finding a New Way to Engage Customers & Drive Revenue

    11|29|16   |     |   (0) comments


    Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
    LRTV Custom TV
    Do You Really Need Gigabit Infrastructure?

    11|29|16   |     |   (0) comments


    Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
    LRTV Custom TV
    BTís Openreach Strategy & Its Updates in 2016

    11|29|16   |     |   (0) comments


    A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
    Upcoming Live Events
    May 16-17, 2017, Austin Convention Center, Austin, TX
    All Upcoming Live Events
    Infographics
    Hot Topics
    Cable Nodes Becoming a Choke Point
    Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
    Consolidated Snaps Up Fairpoint for $1.5B
    Iain Morris, News Editor, 12/5/2016
    Small Arctic ISP Caches Netflix in New Way
    Mari Silbey, Senior Editor, Cable/Video, 12/7/2016
    Like Us on Facebook
    Twitter Feed
    BETWEEN THE CEOs - Executive Interviews
    Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
    Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
    Animals with Phones
    A Mobile Safari Click Here
    Literally.
    Latest Comment
    Live Digital Audio

    Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.