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Starz decides to hit the road after Netflix refuses to introduce tiered pricing for the pay cable channel's content   (Source: wordpress.com)
Starz insisted on tiered pricing instead, which would charge Netflix customers more than the $7.99 per month subscription fee

Yesterday, Starz announced that it would not renew its distribution deal with Netflix when the contract expires in February 2012, which will eliminate Disney and Sony-related programming from Netflix's digital video library.

Now, new reports are saying that Netflix had offered Starz $300 million per year to renew their agreement. This amount is 10 times the rate it currently pays.

But this offer wasn't exactly what Starz was looking for. Instead, the pay cable channel insisted on tiered pricing, which would require Netflix subscribers to pay more than the standard $7.99 per month for movies and television shows from Starz.

Starz was hoping Netflix would charge a premium price for its content so the video streaming/DVD-by-rental service would be more "in line" with cable and satellite providers like DirecTV and Time Warner Cable, since these relationships are important to Starz. These service providers are cautious when it comes to Netflix because they believe customers may stop using their services if enough new content is available for cheaper prices on Netflix. 

But Netflix refused to charge higher prices for access to Starz content on its streaming service. Instead, it was willing to pay the $300 million annual fee for popular Disney and Sony-related content.

When Starz refused, it was decided that the two would go their separate ways once February comes around. Netflix must now decide how it's going to keep up its subscriber growth while Starz determines how it will make up that $300 million it just lost, whether it be through its conventional TV business or possibly through a new digital subscription service.


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Its so much easier to hate...
By Smartless on 9/2/2011 7:36:49 PM , Rating: 1
when I can figure out who's the bad guy. But alas, this is business...

In any case, it would be a shame if Disney and Sony were to drop their content from Netflix since it's nice to have good cartoons and other movies ready for my newborn. I do see Starz point though since on-demand is much more convenient than cable even with a DVR. This could be the start of an interesting divergence.




RE: Its so much easier to hate...
By gorehound on 9/2/11, Rating: -1
RE: Its so much easier to hate...
By borismkv on 9/2/2011 7:59:00 PM , Rating: 5
Yeah...You know, the Livery industry took a pretty steep dive after Henry Ford came around, too. Video Rental is an out-dated business model that can't compete in the modern world. It happens. Develop some marketable skills and get a real job. Don't whine about losing your job when you chose to stay at a dead end for 18 years.


RE: Its so much easier to hate...
By Wolfpup on 9/4/2011 8:33:15 AM , Rating: 1
Wow. This is the sickest comment I've read all day.


By semiconshawn on 9/2/2011 8:21:34 PM , Rating: 5
You worked at a video store for 18 years? Do you know a guy named silent Bob?


RE: Its so much easier to hate...
By FITCamaro on 9/2/2011 11:30:32 PM , Rating: 3
As sorry I am that you lost your job, you should have been smart enough see it coming. People don't want to pay $5 to rent a movie for a few days and have to worry about getting it back before you start tacking on the late fees.

Netflix hasn't made people less social. It's just made their movie renting and watching experience easier.


RE: Its so much easier to hate...
By Samus on 9/3/2011 6:33:54 AM , Rating: 1
There are still video stores that don't just rent porn?


RE: Its so much easier to hate...
By RjBass on 9/3/2011 9:40:37 AM , Rating: 2
Wow, I didn't think their were video stores that rented just porn anymore. Between RedTube.com and the millions of other sites, I just doesn't seem worth it to potentially out yourself as a perv when you can do it all from home.


RE: Its so much easier to hate...
By idiot77 on 9/3/2011 12:38:01 PM , Rating: 3
Watching porn makes you as much of a perv as enjoying sex as makes a woman a slut.

Neither make a bit of sense yet somehow our society has never moved past Queen Vic's day.


RE: Its so much easier to hate...
By Reclaimer77 on 9/3/2011 3:50:25 PM , Rating: 2
Porn is a billion dollar industry here. So is viagra and other enhancement drugs. Sex toys are a huge industry. Our illegitimate birth rates and abortion rates are pretty damn high. I don't know, calling our society "Victorian" is a big stretch imo.


RE: Its so much easier to hate...
By aharris on 9/3/2011 4:51:58 PM , Rating: 2
The worldwide sex industry is estimated at $54 billion, and the American sex industry is estimated to make up half of that. Normally wouldn't bother, but that's a massive difference.

Also, anyone who doesn't recognized the shift in attitudes towards that industry over the last two decades could very well still be living in a Victorian mindset.


RE: Its so much easier to hate...
By nocturne_81 on 9/3/2011 8:36:46 PM , Rating: 4
This argument has taken on an amusingly accurate tone, as most cable companies have cited huge losses quarter after quarter as a huge chunk of profits relies on on-demand XXX movies, of which subscriptions have dropped massively due to online porn sites.

Admittedly, I somewhat feel bad for infringing on copyrights on adult entertainment. After all, porn stars are the ones who are really getting #*%&ed..


By christojojo on 9/4/2011 9:04:04 AM , Rating: 3
seriously the cable companies should start doing channels ala cart instead of forcing us into packages. The problem is stars not netflix. Netflix will get more leverage. The more they don't deal the better. They can start buying libraries of movies.


By MadMan007 on 9/5/2011 11:47:31 PM , Rating: 1
If people did the stuff you want them to do, they wouldn't rent videos either.


RE: Its so much easier to hate...
By Reclaimer77 on 9/3/2011 12:57:17 AM , Rating: 5
I can figure out who the bad guy here is easily: FUCK Starz. If we wanted cable style ass-rape tiered pricing, we would have cable and not Netflix.


By inperfectdarkness on 9/5/2011 11:46:29 PM , Rating: 2
this needs a 6.

it's pretty damn easy to tell that with the metric shitton of money that netflix offered starz, it would have to raise its pricing to compensate.

and still, starz gave netflix the bird. f**k starz.

i don't know about you, but the term "tiered" is a 4-letter word for me. doesn't matter if its pricing, access speeds or what. tiered is EVIL.

"tiered" is almost as bad as "bundling" that cable companies do. do i care that i can get all NFL games now? no. do i care that i can watch the latest michael bay movies? no.

an alternative i can propose is for netflix to say, "ok, screw it. we're going to offer ALL content >2 years old. everything else, we're not paying an arm and a leg for."

people who want newer can subscribe to the bs, super-expensive pay-per-view crap that starz and its ilk want to offer. i don't pay $50 for new games either--so i'm ok with waiting for viewing movies. there's a LOT of classics out there i haven't seen yet. i'd take any of those > a modern "superblockbuster".


Sounds like a chicken and egg problem
By dagamer34 on 9/2/2011 7:58:35 PM , Rating: 2
What I do think is that as revenues from traditional sources decline, Starz is going to wish they had signed up for this deal. The traditional cable model will only survive for so long.




RE: Sounds like a chicken and egg problem
By Mathos on 9/3/2011 1:25:00 AM , Rating: 2
What cable really needs to do, is switch from regular broadcast style shows and make everything on demand as far as popular shows go. Still have dedicated local news and weather channels of course. Instead of charging people for just a straight package where you pay too much and only maybe watch half the channels you pay for. Make it so you pay a set amount for a certain amount of channels, And then you pick the channels you want. Then just more or less use the set top box as a media streaming device with a built in HD tuner. You'd see how fast a lot of the fluff Bs networks and programing would be dropped then. That's honestly what the movie channels need to do, switch their main channels to on demand, for their movie content, and as far as original content like say Dexter, or what not, that plays at a set time, and then after an episode is aired it'd then be available for on demand streaming.


By RjBass on 9/3/2011 9:42:42 AM , Rating: 2
Dish Network is moving in that direction. I can watch much of the content I get online from DishOnline.com. And with my HD box plugged into the web, I get tons of stuff all on demand. They are always increasing the content and don't seem hampered down by the movie studios at all. I rather like it.


By Insurgence on 9/7/2011 2:44:45 PM , Rating: 2
They should already have the infrastructure setup. Especially any company that also does internet. All they need to do is provide upload (so that requests for specific channels can be sent) and download (so that you can get your channel) instead of just doing a broadcast like most of them, talking about wired providers, do now. By providing the channel or channels requested, they could be jerks and limit the number of simultaneous channel watching (ie number of TVs/devices) and improve bandwidth available for the channels provided which can allow for additional features (like what you would get on a DVD) or just provide higher quality video and audio.


By teng029 on 9/3/2011 1:27:22 AM , Rating: 2
which brings up another curious problem. what options are there for Starz other than the traditional cable route? what streaming service will be stupid enough to agree to a tiered service plan?

i'm no Netflix endorser, but Starz got a little too greedy on this deal.


HBO
By Chaosforce on 9/2/2011 8:53:58 PM , Rating: 3
What about HBO? I never did get to finish rome or the Pacific.

But what i really think will aid in Netflix beyond more content is a better way of finding it. I would personally love if Netflix essentially had channels, they just played TV shows/movies that where part of a certain genera. This would give exposure to things you prob wouldnt think of trying but may enjoy then go back and watch from the start.




RE: HBO
By bbomb on 9/2/2011 11:41:43 PM , Rating: 3
That is actually a good idea. I can never just pick a movie when I feel like watching one and have always wondered if it were possible to just have them randomly pick one from a genre.


RE: HBO
By mrkun on 9/3/2011 3:00:16 AM , Rating: 2
You never finished Rome???


RE: HBO
By RjBass on 9/3/2011 9:43:17 AM , Rating: 2
www.hbogo.com


One other thing to add
By amanojaku on 9/2/2011 7:33:43 PM , Rating: 4
NetFlix wasn't desperate for Starz because Starz lost exclusive rights to a lot of popular titles. In other words, Starz isn't as valuable as it used to be since NetFlix can get those titles from other sources.




RE: One other thing to add
By wordsworm on 9/4/2011 7:12:07 AM , Rating: 1
They wanted it badly enough to offer 300m. Seems to me that Starz is getting pressure from the cable companies to level the playing field.

In any case... I can't get netflix in Korea, so who cares?


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