Published:
01-Oct-08
Netflix has partnered Liberty Media subsidiary Starz Entertainment to add Starz movies to Netflix's online streaming option. Access to the Starz Play package is available at no additional cost to Netflix's DVD rental subscribers.
As a result of the deal, 2,500 videos will be added to Netflix's existing digital library of 12,000 movies and TV shows. Content from Starz includes first-run movies, concerts and sports shows. Videos can be viewed on the PC or streamed to the television set via a Roku set-top box (STB). In addition to on-demand video Netflix subscribers can also simulcast Starz TV network channels through their PCs but this functionality is not available through the STB.
The Starz Play on-demand package can also be accessed by non-Netflix subscribers at a cost of $7.99/month.
Our take...
The deal continues the expansion of Netflix's digital catalogue and comes just over a week after Netflix added TV shows from CBS and Disney-ABC to its streaming option. The improved catalogue is likely to increase the effectiveness of the streaming option in its role as a churn reducer for Netflix's core DVD subscription service. But, despite the addition of 2,500 videos from Starz, Netflix's streaming catalogue is still small in comparison to its DVD library of over 100,000 titles.
Netflix is Starz's second business-to-business (b2b) customer for its Starz Play digital movie package following a deal with Verizon in May 2008. Prior to Starz Play, Starz had attempted to sell online movie subscriptions directly to consumers through its Vongo brand but this service shut in September 2008. Consumers have proved reluctant to pay for online movie subscriptions; according to Screen Digest subscriptions generated consumer level revenues of just $5m in the US in 2007, compared to $117m from transactional services. Consequently, Starz's strategy of b2b deals is likely to be more profitable for the company than its previous consumer outlet.
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