Starz Ditches Netflix and Everybody Loses

From PC World: On the same day that Netflix's controversial new pricing model became reality, the company also lost its contract with Starz -- which means some of Netflix's best and newest content will disappear come February 28, 2012. It's a mostly lose-lose situation, but Starz's departure could mean big cable companies' return to prominence, and the dilution of low-cost streaming video.

Netflix's relationship with Starz has deteriorated since the two joined forces three years ago for a reported $30 million. Before the deal fell apart completely, the most painful jolt was when Sony content (for which Starz owns the licensing rights) disappeared from Netflix. Then Starz instituted a 90-day waiting period for its premium content. Now, Starz is just done.

Netflix flung a lot of money at Starz to keep them happy; it paid as much as $300 million -- 10 times the original contract price -- according to the The LA Times. But according to the Times' unnamed sources, Starz wanted to implement a tiered pricing structure, so Netflix subscribers who wanted first-run programming would have to pay more than the base $8 per month plan.

Netflix's answer was no, and Starz, in a statement, said that it would shut Netflix out on February 28, 2012 to "protect the premium nature of [its] brand" and "evaluate new opportunities and expand its overall business" -- meaning that Starz will start shopping around for another partner in streaming media.

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