On Thursday of this week, Starz President Chris Albrecht announced plans to create and launch a digital platform for distributing Starz content very similar to the HBO GO application created by HBO. The application will work on a variety of platforms and may require an existing subscription to the Starz network through a cable or satellite company. However, Albrecht also indicated that the company was exploring the option of providing Starz to consumers that don’t have a cable subscription. This will allow cord cutters to pay for access to the Starz network of channels directly and will likely be rebuked by companies like Time Warner, Comcast, DirecTV and other providers. The Starz application will likely work on game consoles like the PlayStation 3 in addition to tablets and smartphones.
The content partnership between Netflix and Starz ends during February 2012 and will leave over 21 million Netflix subscribers without access to popular content like Pixar films. Netflix attempted to offer Starz over $300 million a year to continue the partnership, but the deal fell apart when Starz demanded a premium pricing tier that would cost Netflix subscribers an additional fee to access the content. Starz is currently in discussions with Amazon and Blockbuster for access to the video content under similar terms, but hasn’t announced any official deal yet. Starz does have existing deals in place with companies like Comcast and Dish Network to allow broadcast of Starz content on digital platforms.
To fill the gap left by the absence of Starz content, Netflix has been quickly adding new partnerships with other media companies since the Starz negotiations broke down a few months ago. Just yesterday, Netflix announced exclusive broadcast rights to the final season of Arrested Development. Other partnerships include a renewal of a deal with ABC, a new deal with the CW, an expanded deal with AMC and a deal stolen from HBO that brings Dreamworks movies to Netflix.
