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Starz To Pull Content From Netflix
tekgoblin writes "Starz plans to remove all of its movies and TV shows from the Netflix streaming library after negotiations failed. Starz, which is owned by John Malone's Liberty Media, said they have ended talks with Netflix to renew a deal that ends February 28th. Netflix stands to lose a large amount of content, as Starz has licenses for first run Sony and Walt Disney movies."
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Wearing pants should always be optional.
Netflix is a wonderful supplement to piracy.
If it isn't on Netflix, it is popular enough for a torrrent. If you cannot find it through nefarious means, it is old enough to be on Netflix.
Everyone seems to be commenting on how this is bad for Netflix, but I'm kind of wondering how the Starz brass thinks leaving anywhere between $250-$300 million on the table is a good idea, or who they're going to receive better offers from. The content is OK, but I somehow doubt their stuff is as premium as they like to think it is...
Well, it's more likely that Starz wants more money for its content than Netflix gets out of its subscribers. According to the article, Starz wanted $300 million a year for the rights to show the same content that four years ago it was passing along for $30 million a year. Netflix has 22 million subscribers. Stars wanted more than $10 per subscriber per year, which would probably be fine if Netflix _only_ had Starz content and no other significant expenses.
But for my $8/month streaming account, I can say without a doubt that I do not watch more than 10% of Starz content.
Netflix just signed a streaming deal with Paramount, Lionsgate and MGM for about $200 million a year — and those three have more and better content than Starz, which suddenly thinks its worth 1/3 more than those others. Not likely.
Netflix basically just said, "Meh, we'll take the money we were going to give to you and give it to someone else for their content." Starz is not the only game in town. It's not even the best game in town. And now everybody knows how much is too much. It's just hardball.
Because it's easier. Honestly, if I could find a dependable source, with as broad a selection of US *and* foreign material as, say Pirate Bay, at a reasonable ($1.99 per title?) price, I'd sign right up. But no, that source doesn't (legally) exist...due to the seemingly constant bickering over licensing, and who gets how big a cut of the rapidly diminishing pie. Maybe one day the media companies will get a clue, but apparently that day isn't here yet.
So you blame Netflix? There are two parties in this contract; we won't know which one is at fault without knowing how much Starz is demanding, and how little Netflix is offering.
Of course, the real villain here is copyright. Not the law, but the idea that it gives publishers complete control over their works (rather than just being a way to help them make a reasonable return). It means that publishers like Starz feel entitled to demand whatever price they want for their content, or flat-out refuse to license it - particularly if they'd rather you spent $10/mo on their service (even though you only want to watch the odd show), rather than paying Netflix $x/mo, of which only a fraction will end back at Starz.
The same issue is gradually making itself known with computer gaming; particularly the current Valve/EA fight, with contract negotiations breaking down as both parties want to push their own distribution systems (Steam/Origin resp.) with their products (notably Crysis2, Dragon Age 2, and soon SW:tOR).
This is bundling, it occurs when you have publishers, distributors and copyright owners all mixed together, and is anti-competitive and evil. This is what led to the EU fining Microsoft €899m in 2008, for bundling WMP with Windows (and made MS give EU users a choice of web browser, by default).
Sadly, the only way around this (short of having very strict and rigorously-enforced anti-trust laws - which take a long time to work; the initial complaint against MS above was made in 1994 - an appeal is still pending) is compulsory licensing. This would mean we could get dozens of Netflixes and Hulus, iTuneses and Spotifies, Steams and Origins, all offering competing services to access the same content - giving consumers the choice for which service to go with (rather than the copyright owner), depending on the terms ($n/mo for streaming v $m per download etc.) - with copyright owners getting paid a 'fair' amount, and not having to worry about endless contract negotiations.
Of course, this will never happen in the US/EU etc. as it would involve the big copyright owners (Disney, Warner Bros, Starz etc.) giving up control, and their refusal to allow these sorts of services already (or reliance on excessive DRM) shows how tightly they cling on to this. Plus it would probably have to involve registering copyrights, a state-run scheme, international co-operation and a significant change to the big copyright treaties (such as TRIPS or the Berne Convention).
But one can dream...
$2B in revenue but $160M in profit. So with no other changes, Netflix stands to lose money next year if they accepted the deal. Unless they get a lot of subscribers, or they figure how to significantly cut costs, or they raise prices again.
Well, there's spam egg sausage and spam, that's not got much spam in it.