Skip to main content

Big red mistake: Starz CEO calls 2008 deal with Netflix ‘terrible’

Image used with permission by copyright holder
Today, Netflix’s streaming video service is recognized as a force to be reckoned with, but just seven years ago, many looked at Netflix’s fledgling online movie and TV delivery as something of a novelty. Perhaps that’s why Starz, a well-established premium movie channel at the time, may have seen a partnership with Netflix as little more than an innocuous experiment. But as the saying goes, hindsight is 20/20, and if you ask Starz CEO Chris Albrecht what he thinks of the agreement that was inked before he arrived, he’ll tell you it was a “terrible” idea. At least, that’s what he said during his appearance at the UBS Global Media and Communications conference, according to Variety.

In October 2008, Netflix scored rights to stream 2,500 Starz movies and TV shows as part of a 4-year agreement, more than tripling its previous count of streaming titles in the process. The deal made Netflix’s streaming service look a lot more attractive, and earned the company some much needed attention from new subscribers. A year later, Bob Clasen, Starz’s CEO at the time, explained to Multichannel News that the deal was a result of Starz’s concerted effort to monetize its online streaming rights after being “late to the table with HD and On Demand.” The deal is estimated to have been worth $20-$30 million.

At the time, Starz saw Netflix as a cool new pet that could fetch its content some extra viewers, at least until Netflix grew so large that it would cannibalize viewers of Starz’s own pay-TV service. According to an anonymous source speaking with The Los Angeles Times, the deal’s terms put into place an “undisclosed cap” on the number of viewers able to watch Starz content online. But Netflix grew faster than expected. In three years, Netflix’s subscriber base increased from 9.4 million to 23.2 millionRenegotiations with Starz failed in September 2011, and all Starz content was pulled from Netflix the following February. It was later reported that Starz declined a$300 million renegotiation offer from Netflix, and just two months later announced its own online streaming service for pay-TV subscribers.

The move, described by Albrecht as a “big boy choice” may have helped Starz’s growth. According to data from financial information firm SNL Financial, in the 18 months following its deal with Netflix, Starz’s penetration of pay-TV households increased from 19.9 to 22 percent.

Editors' Recommendations

Keith Nelson Jr.
Former Digital Trends Contributor
Keith Nelson Jr is a music/tech journalist making big pictures by connecting dots. Born and raised in Brooklyn, NY he…
Netflix’s ad-supported tier will start with a big drawback
Netflix app icon on Apple TV.

Netflix first announced plans for an ad-supported version of its streaming service several months ago, though details about it have been scant.

But during an earnings call on Tuesday, Netflix co-CEO and chief content officer Ted Sarandos revealed that Netflix’s ad-based tier will not include all of its licensed content at launch.

Read more
Heartstopper trailer shows Netflix’s next big romantic series
The cast of Heartstopper.

Later this month, Netflix is turning traditional teenage coming-of-age shows on their head with Heartstopper, an LGBT love story that tackles romance in an unexpected way. In the first trailer for the series, viewers meet Charlie Spring (Joe Locke), a very geeky and gay teenager who hasn't found anyone to return his romantic love. And yet sparks fly almost immediately when Charlie meets Nick Nelson (Kit Connor). Nick is almost everything Charlie isn't, including athletic, popular, and heterosexual.

The gulf between Charlie and Nick's desires seems so insurmountable that Charlie actually asks one of his friends how he can stop feeling so strongly about Nick. And while Nick may not realize it, he appears to have feelings for Charlie too. He even invites Charlie to join him on the rugby team, even though sports and Charlie looks like a bad mix. It's ambiguous at the moment if Nick made that request just as an excuse to spend more time with Charlie.

Read more
Netflix to shoot pair of Red Notice sequels back-to-back
Ryan Reynolds, Dwayne Johnson, and Gal Gadot in Red Notice.

Last year, Netflix made a big splash when it picked up Red Notice from Universal Pictures, and the film went on to become one of the most popular movies on the streaming platform. That was largely due to the incredible star power of Dwayne Johnson, Gal Gadot, and Ryan Reynolds in the leading roles. Now, Deadline is reporting that Johnson, Gadot, and Reynolds are all expected to return for Red Notice 2 and Red Notice 3. Additionally, Netflix has ambitious plans to shoot both sequels back-to-back.

While the plan is to begin filming next year, that isn't yet set in stone. Johnson, Gadot, and Reynolds have extremely busy schedules, and it will be a challenge to line all three of them up again. That's one of the reasons why the sequels are also reportedly expanding the cast beyond the core trio. Deadline's report compares Red Notice's expanded roster of characters to the Ocean's Eleven films, which featured an all-star cast. Director and screenwriter Rawson Marshall Thurber is also slated to return, and he has reportedly also begun writing the sequels.

Read more