End of Netflix Deal Cuts Starz RevenueProfits Drop in First Quarter 5/09/2013 4:50 AM Eastern
Starz reported lower earnings as its Netflix deal ended and new affiliation agreements call for smaller subscriber fees.
First quarter net income fell to $57.9 million, or 47 cents per share, from $77.8 million, or 65 cents per share a year ago.
Revenue fell 1% to $399 million primarily because the company's affiliation agreement with Netflix was not renewed. Affiliation agreement with two other distributors renewed in the fourth quarter called for less favorable financial terms.
"Starz delivered solid operational performance in the first quarter with record subscriber totals at Starz and Encore. We continue to execute our strategy to grow the Starz Original series programming portfolio with quality dramatic series," Chris Albrect, CEO of Starz, said in a statement. "We are confident that over time our approach to original programming will deliver strong shareholder value."
The company said subscriptions to its Starz service increased by 7% to 21.6 million and Encore subscribers were up 4% to 35.1 million.