News

Premium Nets Pull Back From Netflix

3/28/2011 12:01 AM Eastern

This spring, Netflix is getting a colder
shoulder from cable’s premium programmers.

Showtime Networks last week said past seasons of currently
airing originals, including Dexter and Californication,
will not be available from Netflix’s Instant Streaming service
as of this summer. Starz Entertainment separately said
it would delay new originals and, eventually, first-run movies
from Netflix for 90 days.

HBO, meanwhile, has never inked a streaming-media deal
with the company, which tallied just over 20 million subscribers
as of the end of 2010.

Over the past year, Netflix has been steadily amassing TV
content, in a bolder challenge to the pay TV premium networks.
Earlier this month, it announced a deal with independent
studio Media Rights Capital to acquire exclusive fi rst-run
rights to a minimum of 26 episodes of House of Cards, an adaptation
of a BBC miniseries, set to debut on the Internetstreaming
service in late 2012.

Sensing Netflix is potentially more foe than friend, both
Starz and Showtime are becoming stingier with the content
they provide through the Internet streaming service.

Starz will implement a new policy under which episodes of
its original series will not be available on Netflix until 90 days
after they debut on the Starz network, starting with the April
1 premiere of period drama Camelot, with first-run movies
later following suit.

However, subscribers with Comcast, Dish Network and
AT&T — which have agreements with Starz to offer “TV Everywhere”
access to authenticated content — will still have
full day-and-date access to all current network programming
through Starz Online.

On Netflix, past seasons of Starz series, including
Spartacus, and previously aired movies will continue to
be available for streaming, according to a spokeswoman
for the programmer.

Netflix vice president of corporate communications Steve
Swasey said the change was “straightforward,” noting that the
company’s subscribers place more value on breadth of content
selection than immediacy. He said the 90-day window for
Starz content was still shorter than some TV licensing deals.

Moreover, Swasey noted, Starz signed up 800,000 new
subscribers in the fourth quarter of 2010, even with the
programmer’s content
output deal with Netflix.
“It’s good for everybody,”
he said. “If you want to
watch [Starz’s original
programming] when it
airs, call your provider
and subscribe to Starz.”

Starz and Netflix are
in the midst of negotiating
a new deal, with the
current agreement set to
expire in the middle of
the first quarter of 2012.
Some pay TV distributors
were aggravated by
Starz’s deal with Netflix,
which includes access to about 2,500 Starz movie titles as
part of subscription plans starting at $8 per month — compared
with upwards of $14.95 monthly for a Starz multiplex
through a traditional distributor.

Netflix’s deal with Starz is for Starz Play, available to
broadband providers and online distributors. Starz Play,
as distinct from the Starz Online services for pay TV affiliates,
is also offered by Verizon and Qwest Communications
International to their high-speed Internet users for an additional
monthly fee.

Showtime, for its part, said that while its current shows
will be coming off Netflix, past series, such as The Tudors,
will continue to be available.

Regarding the Showtime change, Swasey said, “We’re
perplexed … because we expect to continue providing
Showtime titles.”

September