The years-long partnership between Netflix and Starz will dissolve this February, leaving subscribers without one of Netflix’s key providers of new movies.
According to the LA Times, the deal fell apart Thursday when Starz wanted Netflix to charge subscribers a premium to view its content. That concession would have been in addition to Netflix’s offering Starz $300 million for licensing rights.
Netflix CEO Reed Hastings told Business Insider that, while his company wanted Starz on board, it would appropriate the money to getting other content.
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 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.
While Hastnings has not been averse to dropping hundreds of millions on licensing agreements, it appears that the tiered-pricing request conflicted too much with his company’s business model.
As of now, according to Hastings, Starz movies accounted for a mere 8 percent of Netflix’s views.
Hastings also indicated that the companies would be open for future licensing deals and negotiations.