Printed from http://www.electronista.com

Leak: Starz wanted to force tiered prices on Netflix

updated 06:15 am EDT, Fri September 2, 2011

Starz, Netflix deal collapsed due to cheap pricing

Following the announcement that Starz will pull its content from Netflix when its current contract expires on February 28, it has emerged that the reason the arrangement collapsed is because Starz wanted to force Netflix into a tiered pricing structure for its content. Starz, which distributes content from Sony Pictures and Disney among others, did not believe that the $300 million plus deal that Netflix was offering represented appropriate value for its content. However, any deal that pushed Netflix into charging higher prices for certain Starz content would have resulted in a higher monthly fee for its subscribers.

Starz management also reportedly felt that any further deal with Netflix could undermine the value of its premium content. For Starz, a wash on effect of this could affect its ongoing relationship with other partners that distribute its content at a premium including DirecTV and Time Warner Cable. A deal with Netflix that resulted in its content being distributed more cheaply online had the potential to negatively affect the subscriber base of its satellite and cable-based content distribution partners.

Stars is reported to make around $7 per subscriber through its partnership with DirectTV and Time Warner Cable. As Netflix currently only charges its subscribers $8 in total, it couldn't compete with the value that Starz is generating from its other partners. At best, it would have generated around $1 per Netflix subscriber, an arrangement that it ultimately deemed untenable. [via LA Times]



By Electronista Staff
Post tools:

TAGS :

toggle

Comments

Login Here

Not a member of the MacNN forums? Register now for free.

toggle

Network Headlines

toggle

Most Popular

Sponsor

Recent Reviews

Sound Blaster Roar Bluetooth speaker

There could very well be a new king of the hill for Bluetooth speakers, with Sound Blaster's recent entry into the marketplace. Bringi ...

Kenu Airframe Plus

Simple, stylish and effective, the Kenu Airframe + portable car mount is the latest addition to Kenu's lineup. Released earlier this y ...

Plantronics Rig Surround 7.1 headset

Trying to capture the true soundscape of video games can be a daunting task. Looking to surround-sound home theater options, users hav ...

Sponsor

toggle

Most Commented

 
toggle

Popular News