& 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.


     


     

    Featured Video
    From The Founder
    Light Reading founder Steve Saunders grills Cisco's Roland Acra on how he's bringing automation to life inside the data center.
    Flash Poll
    Upcoming Live Events
    February 26-28, 2018, Santa Clara Convention Center, CA
    March 20-22, 2018, Denver Marriott Tech Center
    April 4, 2018, The Westin Dallas Downtown, Dallas
    May 14-17, 2018, Austin Convention Center
    All Upcoming Live Events
    Infographics
    SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
    Hot Topics
    Here's Pai in Your Eye
    Alan Breznick, Cable/Video Practice Leader, Light Reading, 12/11/2017
    Ericsson & Samsung to Supply Verizon With Fixed 5G Gear
    Dan Jones, Mobile Editor, 12/11/2017
    Verizon's New Fios TV Is No More
    Mari Silbey, Senior Editor, Cable/Video, 12/12/2017
    The Anatomy of Automation: Q&A With Cisco's Roland Acra
    Steve Saunders, Founder, Light Reading, 12/7/2017
    You Can't Fix OTT Streaming Problems If You Can't See Them
    Mike Hollyman, Head of Consulting Engineering, Nokia Deepfield, 12/8/2017
    Animals with Phones
    Don't Fall Asleep on the Job! Click Here
    Live Digital Audio

    Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

    During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

    She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

    Like Us on Facebook
    Twitter Feed