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

Netflix-Starz-slash
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.

Home Theater

Free original content is coming to Apple devices, but only if it’s rated PG

New reports say that Apple is planning to bring free original content to the TV app on its devices next year, but don't expect any blood and gore, as the company will only show PG content.
Home Theater

Cutting the cord? Let us help you find the best service for live TV streaming

There's a long list of live TV streaming services available to help you cut the cord and replace your traditional TV subscription. Each is different in important ways, and this guide will help you find the best one for you.
Home Theater

Looking to cut cable? Here’s everything you need to know about Pluto TV

Pluto TV offers plenty of entertainment in a fashion similar to live internet TV services, only at no cost — you don’t even need to register. Too good to be true? Here’s everything you need to know.
Home Theater

AT&T takes aim at Netflix with HBO-led streaming service set for a 2019 launch

HBO fans have worried that parent company AT&T was looking to turn it into Netflix, but the company is now looking to instead launch a new, separate streaming service with programming from HBO, as well as Warner properties.
Movies & TV

The best movies on Amazon Prime right now (October 2018)

Prime Video provides subscribers with access to a host of fantastic films, but sorting through the catalog can be an undertaking. Luckily, we've done the work for you. Here are the best movies on Amazon Prime Video right now.
Movies & TV

Best new shows and movies to stream: ‘The Haunting of Hill House’ and more

Need something to watch this weekend? Check out our list of the best new shows and movies to stream right now. On the list this week: The Haunting of Hill House season 1, The Romanoffs, and more.
Movies & TV

‘Venom’ devours the box office competition with monstrous second weekend

Sony Pictures anti-superhero movie Venom won the weekend box office for the second straight week, beating musical drama A Star is Born, as well as three new releases that made it into the weekend's top ten movies.
Movies & TV

'Prime'-time TV: Here are the best shows on Amazon Prime right now

There's more to Amazon Prime than free two-day shipping, including access to a number of phenomenal shows at no extra cost. To make the sifting easier, here are our favorite shows currently streaming on Amazon Prime.
Emerging Tech

Here’s all the best gear and gadgetry you can snag for $100 or less

A $100 bill can get you further than you might think -- so long as you know where to look. Check out our picks for the best tech under $100, whether you're in the market for headphones or a virtual-reality headset.
Home Theater

Dish Network or DirecTV: Which is the better choice for you?

So, you’ve chosen to go with a satellite television provider. Check out our quick rundown of what both Dish Network and DirecTV offer in terms of content, hardware, and pricing, and why you might choose them over streaming services.
Movies & TV

New 'Mandalorian' photo links series to Boba Fett and 'Star Wars Holiday Special'

Jon Favreau's live-action Star Wars series planned for Disney's streaming video service will be titled The Mandalorian. The series will be one of the most expensive television shows ever made. Here's everything we know about it so far.
Movies & TV

'Avengers 4' directors signal the end of reshoots with mysterious photo

The events of Avengers: Infinity War changed the Marvel Cinematic Universe in some big ways and left fans wondering how its heroes can possibly recover. Here's everything we know about Avengers 4, the sequel to Infinity War.
Movies & TV

Celebrate the 25th anniversary of ‘The X-Files’ with the show’s 10 best episodes

The X-Files premiered 25 years ago, so here are the 10 best episodes of the award-winning sci-fi series. From alien-abduction drama to hilarious satires, these are the best episodes from all 11 seasons of the hit series.
Movies & TV

'Spider-Man: Far From Home' photos and video reveal Spidey's new costume

Despite some mystery surrounding Spider-Man's future after the events of Avengers: Infinity War, Spider-Man: Far From Home swings into theaters in July 2019. Here's everything we know about the movie so far.