Netflix Will Lose Starz, it’s Most Valuable Source of Movies

well, it looks like Netflix is about to get a little more dull coming February of 2012. If they did renew their service with Netflix they could of made a whopping $300 million to renew their contract. Unfortunately, the executives said that Stars could lose money if more subscribers went to Netflix instead of ordering the cable channel.

Starz said: “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, 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.”

In the beginning, people didn’t have the ability to stream movies, when Starz signed up with Netflix in 2008, they actually were making money, but now that almost 25 million people are watching Netflix, Starz is loosing money since more and more people are cancelling their subscription to the Starz Cable Channel to move over to Netflix.

Netflix spokesman Steve Swasey provided the following statement in response to the news:

Starz has been a great content partner since 2008 and we are thankful for their support.

While we regret their decision to let our agreement lapse next February, we are grateful 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 Netflix offered, over the years Netflix has 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 even 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.]

So, as much as I love Netflix, it looks like now I’ll be paying to much for old TV re-runs and movies that premiered almost 10 years ago. This is a losing deal for Starz though, because I’m still not going to get the Starz Movie Package. I fear that all this will cause is for more and more people to stream illegal movies from Starz over the internet.