Earlier today we reported that Starz had called off all talks to renew their content licensing agreement with Netflix.
Following the move, Netflix CEO Reed Hastings had this to say of the break (via BI):
It will be interesting to see what Netflix will invest the money in now that they do not have to pay out $300 million per year for mediocre-to-good content that only amounts to 8% of total viewership.
Additionally, the company hiked its prices today, splitting streaming and DVD rentals.
Starz has been a great content partner for many years and we are thankful for their support. While we regret their decision to let our agreement lapse next February, we are grateful to Chris and his team for the early notice of their decision, which will give us time to license other content before Starz expires.
While Starz was a huge part of viewing on Netflix several years ago because it was some of the only mainstream content we offered, over the years we spent more and more licensing great TV shows from all four broadcast networks and many cable networks, and we have licensed 1st run movies from Relativity, MGM, Paramount, Lionsgate and others.
Because we’ve licensed so much other great content, Starz content is now down to about 8% of domestic Netflix subscribers’ viewing. As we add a huge more content in Q4, we expect Starz content to naturally drift down to 5-6% of domestic viewing in Q1. We are confident we can take the money we had earmarked for Starz renewal next year, and spend it with other content providers to maintain or even improve the Netflix experience.
We have tremendous respect for the Starz creative team, and we look forward to someday licensing some of their original or licensed content.
It will be interesting to see what Netflix will invest the money in now that they do not have to pay out $300 million per year for mediocre-to-good content that only amounts to 8% of total viewership.
Additionally, the company hiked its prices today, splitting streaming and DVD rentals.
