Starz Reportedly Offered Netflix $300 Million Per Year, But They Wanted The Company To Increase Consumer Prices
Netflix, Inc. (NASDAQ:NFLX) almost made a deal with Starz, but the TV programming channel companies wanted Netflix consumers to have to pay more for the additional content. Starz reportedly offered Netflix $300 million per year to renew their agreement, but they wanted Netflix to have tiered pricing. Tiered pricing would have required Netflix subscribers that wanted movies and TV shows to pay more than the $8 per month. Apparently this was the reason why the talks between Starz and Netflix ended. Starz believes that this would have protected their relationship with video programming distributors. DirecTV and Time Warner Cable is worried that customers will “cut the cord” if there is enough fresh content available on the Internet for a lower price.
Netflix was not willing to introduce a higher price for their services to their customers. However Netflix was willing to pay a high price for access to movies made by Walt Disney Pictures and Sony Pictures.
[LA Times]This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry