walkitout (walkitout) wrote,
walkitout
walkitout

Netflix, Starz, Malone and Wild, Unfounded Speculation

http://latimesblogs.latimes.com/entertainmentnewsbuzz/2011/09/netflix-to-lose-starz-its-most-valuable-source-of-new-movies.html

Netflix has had a deal with Starz since 2008, set to expire early in 2012. The mobile viewing market has changed a lot since then. Starz has decided not to re-up and announced that.

The blogger above offers this explanation:

"However, executives at Starz apparently concluded that they would lose even more money by giving consumers a reason to subscribe to Netflix instead of the cable channel."

I think that explanation is highly unlikely, even compared to other speculation.

Here's a quote about why Starz said they did this:

""This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content," Starz said in a statement Thursday. "With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business.""

You can read all kinds of things into that. Here's what I get:

(1) A patent lawsuit against Amazon but not B&N
(2) Buying into B&N with the avowed intention of accessing the Nook business
(3) Not renewing a contract that puts Starz content on other tablets.

And I get: oh, look, the Nook is about to become a cheap media tablet, competing against the premium tablet (iPad) and everything else.

However, other commenters go elsewhere:

http://www.bloomberg.com/news/2011-09-02/dish-said-to-plan-blockbuster-rival-to-netflix.html

This describes a hypothetical video streaming service offered by Dish Network under the Blockbuster brand (which it bought on the cheap recently). "The offering is expected to include movies from Starz LLC, said the person. Starz announced yesterday it had halted negotiations with Netflix to renew an online-viewing deal for next year." Well, everyone sort of expected Netflix and Starz to renew, too, now, didn't they? That's why Netflix took a dive on the announcement.

Here's a question from the peanut gallery: Why would Starz sign a deal with Dish Network's streaming service? Any amount of money they could extract from them could probably have been matched by Netflix (altho if Dish Network ponies up a half a billion then I guess I'll be proven wrong). More importantly, Dish Network is the primary competitor for DirecTV. Which traces back up to the same guy as the three numbered items listed above.

Here's some entertainment regarding the B&N deal:

http://www.fool.com/investing/general/2011/05/20/john-malone-cant-be-this-stupid.aspx

Seriously, I cannot be the only person who has put these pieces together, right? My question is, how much is it worth to be second or third in line for the portable media device of choice (definitely behind iPad, but it's expensive enough to be out of the running for a huge chunk of the market, never mind the rabid anti-Apple sentiment floating freely out there; if the Amazon tablet rolls out at 7 inches and $250 as techcrunch suggests, it'll be a tough competitor

http://techcrunch.com/2011/09/02/amazon-kindle-tablet/
).

Wait: this is a guy who made a ton of money owning things like Starz. I'm pretty sure he knows how to make a buck or three being second or third in line behind the premium choices.
Subscribe
  • Post a new comment

    Error

    default userpic

    Your reply will be screened

    Your IP address will be recorded 

    When you submit the form an invisible reCAPTCHA check will be performed.
    You must follow the Privacy Policy and Google Terms of use.
  • 0 comments