When Starz announced that it ended its contract renewal with Netflix. At first I thought it was a rumor akin to the absurd ones that have been flying around about Apple’s plans to buy Hulu.

The statement was plain and to the point:
“When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform.”

As a subscriber I had to consider if Netflix was worth the price to continue. Netflix depends on the Starz to bring in current releases for its streaming service. Netflix does not have that much current content to start with. The lost of Starz is going to hurt more so than the recent lost Sony. Sony’s movies were removed in July. Starz takes with it content from Disney, over 1000 movies and original shows when the agreement expires.

The stock crashed in the market, going down as low 9% If Netflix can not find new content providers by February 12, 2012 when the contract expires; more people might than when the prices were increased. The rumor is that Starz wants to squeeze more money out of Netflix in a renewed agreement next year.

Netflix CEO Reed Hastings seems to be stressed about the departure of Starz and puts there exit into perspective:

“Starz is 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. 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.

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. We expect Starz content to drift down to 5-6% of domestic viewing in Q1.”

So, basically, Starz was not doing much for Netflix so subscribers should not miss it too much. There is a lot of other content out there with to come. It’s not time to jump ship just yet.

By Rubens Saintel

Proud father, #Haitian, photographer, consultant, writer & entrepreneur. I love video games, movies, plays, technology (surprise), beta testing apps and all things sci-fi. | |