Here's How Much Netflix (NFLX) Was Willing to Pay Starz, and Why Talks Stopped
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Netflix (Nasdaq: NFLX) is trading lower Friday morning following reports that talks to renew its contract with Starz, of Liberty Entertainment (Nasdaq: LSTZA), broke down.
You can read a summary of the decision here. Do you want to know how much Netflix was offering to Starz to renew its deal?
Sources have said Netflix was willing to pony-up $300 million to renew, according to the LA Times this morning. But Starz wanted more, like implementing tiered-pricing for Netflix subscribers. The demand would mean that Netflix subscribers would have to pay more than the standard $8 per month to access Starz premium content.
This was evidently the sticking point for Netflix.
Starz was also aiming to protect its relationship with multiplatform video programming distributors (MVPDs) like DirecTV (NYSE: DTV) and Time Warner Cable (NYSE: TWC), as the MVPDs have become weary of customers cutting the cable in favor of Netflix. (Though Hastings has said in the past that Netflix aimed to complement MVPDs, not take business away.)
It also seems that CEO Reed Hastings was rather nonchalant about the whole thing, saying Starz was a big part of Netflix years ago, but other content has provided a wider variety of viewing options for subscribers.
This should be viewed as a positive, as Netflix, amid pressure, is sticking to its "business guns" and holding on to its overall philosophy, even as crisp dollar bills are being waved in its face.
Netflix is trading about 10 percent lower Friday morning.
You can read a summary of the decision here. Do you want to know how much Netflix was offering to Starz to renew its deal?
Sources have said Netflix was willing to pony-up $300 million to renew, according to the LA Times this morning. But Starz wanted more, like implementing tiered-pricing for Netflix subscribers. The demand would mean that Netflix subscribers would have to pay more than the standard $8 per month to access Starz premium content.
This was evidently the sticking point for Netflix.
Starz was also aiming to protect its relationship with multiplatform video programming distributors (MVPDs) like DirecTV (NYSE: DTV) and Time Warner Cable (NYSE: TWC), as the MVPDs have become weary of customers cutting the cable in favor of Netflix. (Though Hastings has said in the past that Netflix aimed to complement MVPDs, not take business away.)
It also seems that CEO Reed Hastings was rather nonchalant about the whole thing, saying Starz was a big part of Netflix years ago, but other content has provided a wider variety of viewing options for subscribers.
This should be viewed as a positive, as Netflix, amid pressure, is sticking to its "business guns" and holding on to its overall philosophy, even as crisp dollar bills are being waved in its face.
Netflix is trading about 10 percent lower Friday morning.
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