Netflix offered Starz more than $300 million per year to renew their agreement…
Starz wanted Netflix to charge a premium price for its content in order to put the popular online video service more in line with cable and satellite providers. Protecting relationships with multiplatform video programming distributors (MVPDs) like DirecTV and Time Warner Cable is critical to Starz.
Even though the $300M offered was 10 times what Starz received yearly from the previous contract, they walked away because Netflix (rightly) held firm to no tiered pricing.
Why does Starz care what Netflix charges? Simple. The cable companies charge premium fees for Starz content, and were not happy to see that content on Netflix with no premium. Starz opted to “protect relationships” with the cable companies rather than let Netflix customers see their content.
I’d love for this decision to backfire on Starz. It would help loosen the cable companies’ grip on alternate sources of content.