It’s been a rough week for Netflix.
In addition to public backlash over the company’s previously announced subscription price hike, Netflix executives are scrambling in the wake of news that premium cable channel Starz is apparently opting to not renew its licensing agreements with the online streaming juggernaut.
As of February 28th, 2012, Netflix will lose a gargantuan chunk of its top streaming movie and TV content.
Starz’ decision to abandon the Netflix platform is obviously a business decision based on eliminating a continuing loss of revenue to the streaming service. In recent months, it has become clear that Starz now perceives Netflix to be more of a threat than an ally. After all, if customers can subscribe to an $8-a-month unlimited streaming plan to get out of having to pay for premium cable television (the biggest source of Starz’ revenue), the cable network stands to lose out substantially.
“When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform,” Starz acknowledged in a public statement. “This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content. With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business.”
Although specifics of the proposed deal weren’t announced, Netflix is believed to have offered Starz more than $300 million to maintain the relationship.