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Cable Technology Feature Article

June 01, 2011

Netflix Ready to Shell out for Starz Lineup

By Chris DiMarco, TMCnet Web Editor

Netflix has done everything in its power to assemble the best possible line up for its customers and, not surprisingly, they’re paying a whole lot to keep that line up in place. Renowned for a number of their original programs, Starz signed agreement with Netflix in 2008 that made them the only online rental service that can carry their shows. This time around, Starz is playing hard ball with news that the resign payment could cost Netflix as much as ten times the original amount.

Netflix’s CEO Reed Hastings told listeners at the All Things Digital (News - Alert) conference Wednesday that he wouldn’t be shocked to pay up to $300 million dollars annually to resign Starz. The initial 3-year agreement between the two companies only cost Netflix $30 million annually.

Netflix has become an outlet for many television providers looking for a new way to offer syndicated programs on demand for potential viewers. In 2010, Warner Bros. inked a four-year domestic deal with Netflix, giving Netflix streaming rights to all 100 episodes of “Nip/Tuck” for roughly $200,000 per episode over the life of the deal. Netflix is also currently in talks with Newscorp to offer daily episodes of its news programs.

As Netflix expands from the DVD player to the PC and eventually on to smartphones it’s essential that the company continue to provide top notch programming to make their customer happy. In the highly competitive streaming marketplace, content is still king.

Chris DiMarco is a Web Editor for TMCnet. He holds a master's degree in journalism from Quinnipiac University. Prior to joining TMC (News - Alert) Chris worked with e-commerce provider Suresource as a contact center representative and development analyst. To read more of his articles, please visit his columnist page. Follow him on Twitter @cpdimarco.

Edited by Rich Steeves