Starz wanted Netflix to charge more for "premium tier"

Apple TV bugs: Sorry we could not reach the Netflix service...!

Netflix couldn't come to a deal to keep Starz content on their service, so they'll be losing it next February, but it turns out Starz wanted more than just Netflix's money to stay -- they wanted more of our money too:

Netflix offered Starz more than $300 million per year to renew their agreement, but the pay cable channel was insistent on so-called tiered pricing, according to people close to the negotiations but not authorized to speak on the record. Tiered pricing would require Netflix subscribers who want movies and television shows from Starz and other premium providers to pay more than the standard $8 per month.

Basically, they wanted Netflix to become as expensive as cable so we, the customers are discouraged from leaving cable and living off digital antennas and services like Netflix.

That's nice for Starz, but do you want to pay more for Netflix to keep The Karate Kid on your iPhone, iPod touch, iPad, and Apple TV?

[LA Times

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Rene Ritchie

EiC of iMore, EP of Mobile Nations, Apple analyst, co-host of Debug, Iterate, Vector, Review, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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Reader comments

Starz wanted Netflix to charge more for "premium tier"


I looked at the Starz list of movies last night on Netflix, added to my instant queue the few that interested me (I've seen most of the Autry already, chose a couple early John Wayne and a Roy Rogers) and I've got almost 6 months to see them. Hardly worth a premium payment, and if enough people continue to drop cable, Starz will be back.

Cord cutters, streamers, etc. Why would you get the best HD equipment, screens etc and then ruin the experience by getting poor streaming content that doesn't even take advantage of that nice equipment you have.. Might as well go back to 4:3 screens and crt monitors.. And now they want to charge you for that streaming content the same as they would if you had cable? Priceless.

Most people are sick of paying for channels they don't need or wan't. I find streaming on apple tv awesome. A lot of movies and free podcasts in HD.Netflix is used more than regular cable and ota is better looking in Hd than through a satellite or cable box. So your idea of people not using equipment to its potential is false and actually they are getting smarter and at a cheaper price. Some people have it all wrong!!!!!

Thank you for making my point. Just because you see an HD logo does not mean you are seeing it in FULL HD.. Last I checked your Apple TV can't even play FULL HD (1080P) video, it can connect at 1080p but then up-scales all video from 720p to 1080p (which is stretching the image). Have you ever hooked a bluray player (with bluray movie) up to your TV? (assuming you have a newer TV that even supports 1080p).. Try it sometime, you can see the difference VERY easily :) Not to mention your STREAMING is compressing the image as well adding more distortion to both the image and sound. So you might want to check your facts before you claim some people have it all wrong. My point was - people spend money on the new full hd (1080p) equipment, but then try to save a buck by going to streaming, making it so they don't even get the full benefit. Personally - when I take the time to watch something, I'm going to make sure I'm seeing it in the best possible resolution and sound my TV can handle.. and once you have done this, there is no going back to streaming / 720p (Dvd's) etc.

Wired has an Interesting take on what this (lack of a) deal portends for the future. The author sees significant Netflix customer growth, not in movies, but in TV viewers who just want back catalogs of shows, on demand. I use Netflix for this extensively; they just do it better than anybody else so far, though HBOGO is pretty good now, too.

Starz’s mistake was treating Netflix as if it were a cable operator negotiating with a premium pay network, rather than what it’s become: a premium pay network every bit the rival of Starz, Showtime or HBO with a distribution model that bypasses the cable operators altogether.

I'm talking about the ones who will go out and spend $1000's on the best HD equipment and then turn around and stream everything to save a few bucks on their cable bill.. HD Entertainment and Media is obviously not a priority for you, so yes, I can see where paying money on cable is a waste.
For someone like myself, I'm saving money now by being able to ditch the streaming option and go with just the blu-ray disk plan as far as netflix is concerned.. I also have everything but HBO/Premium Movie Channels for cable service (so the full HD lineup, etc).. Of course I also have 42" 1080p LCD's in each bedroom and a 155" HD Projector screen (all connected via SageTV server/extenders).. Therefore without HD cable and bluray quality movies, all of it would be wasted. I can't stress enough how crappy streaming, analog/non-HD cable channels, or even DVD's look on any of the screens..

You spent all the money on TV equipment and can't even afford decent internet connection. Pathetic. This is why your stream looks like garbage. Fork out 50 bucks a month and get something higher than 1.5Mb.

I've got 50Mb down so im doing just fine, but Again some amature misses the point.. even with the best connection, the media being streamed is not full hd @1080p or dts audio. so no matter how good your connection you are not going to get bluray quality through netfix or your apple tv. You will be lucky to even get close to dvd quality.. You really think these people trying to save a buck by cutting cable are willing to get the highest tier of internet speed, chances are they dont undertand bandwidth either.. In the end it won't matter if you give up cable for streaming because as soon as enough people do it, cable companies will just put caps on your net connections and deals like this one with starz will fall through because those companies are still in control weither your streaming or not..

Do yourself a favor, go out and get Amazon Prime - $75 for the year (last i checked) - you get free 2 day shipping from amazon, and you can then just start ordering all of your normal daily consumer goods from them in bulk or on the cheap, then you get free movie/tv show streaming through them as well.. You can also add other familiy members (who live elsewhere, etc) to your prime account so they also get free 2 day shipping (or 3.99 1 day). Our prime membership paid for itself in less than 2 months (in shipping costs and product savings vs local/tax purchases for common items).. The free streaming is just icing on the cake.

Except Amazon Primse doesnt offer nearly as much as Netflix when it comes to variety and titles, PLUS with Netflix you can stream it on your iPhone, iPad, iMac, PC, Ps3, 360, Wii, 3DS, Ds, Smart TV and on and on ....

Amazon recently had gained some major content for streaming - not sure if you have looked at it lately.. Also Amazon also streams to any of those devices with PlayON, and most of them with their own app or browser - there is an app (Smart TV's, Android, etc) for just about every device, and if it supports Flash it works out of the gate.

Nope - just pointing out ALTERNATIVES that have other value besides streaming... Sounds like your on Netflix's payroll ;) and besides I use netflix, just not for streaming, I subscribe to the 6 disks at a time with the blu-ray disk option - and I discontinued streaming services through them because I never used it (So I saved money with their plan changes). If I'm going to take the time to watch a show on my HD equipment, im damn well going to do it in the best format possible. I already had Amazon Prime before they even started offering the streaming, now its just another bonus and another reason I don't need it through netflix too.

Amazon isn't supported on iOS devices. I can't remember the last time I watched a movie on my 46" LED so it's a no-go for me and probably most of the people here on tipb. You know what tipb stands for, right?

Starz alone costs as much as Netflix. Starz just wanted part of the monthly fees like they get when you order it on cable. Although having Netflix and paying maybe another $8/month for premium channels like Starz is still far cheaper than cable.

not if you had to do that for every channel that thought they were premium--it would catch up quick

Not that I agree with Starz in general, but it seems like you twisted their words a WAY too much, Rene.
Your quoted:
"Tiered pricing would require Netflix subscribers who want movies and television shows from Starz and other premium providers to pay more than the standard $8 per month"
And then you turn around and write:
"Basically, they wanted Netflix to become as expensive as cable"
How in the world do you reach that conclusion? There's quite a big of a gap from $8/month to the typical ~$50 (or more)/month.
Try to show some journalistic integrity.

Not sure about you but I don't pay $50 for starz or any premium. Most premiums are about $10-15 each in my neck o' da woods. It may add up plus basic to over $50, but the tier itself is comparable

Great move by Netflix to stand firm and say NO to Starz,
Starz will soon realize that $300M/year was better than what they will get now from Netflix come February ; ZERO!

Got Starz on cable already. No way I would pay extra on Netflix for their service. Maybe Starz will come with Starz Go?

No, Nerd, this is why YOU fail. You put too much focus on your precious equipment and not the content. Unlike you, I don't need to watch everything in the highest resolution possible every time. I'm perfectly happy, when I'm on the train or at a friend's, to watch the content in decent, if not end-all-be-all HD. This is because I understand there's more to movies and TV than wanking off to who has the bigger screen.
Get your head out of your ass and realize your way I not the only way. In fact, your way is the minority at best.

the difference is however is that the cable companies also control the majority of high speed net connections, so if too many people start streaming, then they will just put caps in place and bandwidth throttles. dont kid yourself, this is more about control to starz then money..

I almost think I want this.
Look at HBO Go. There is absolutely no way to pay monthly to get HBO Go, other than having the HBO cable channel. I would easily pay monthly for HBO, but can't.
If HBO approached Netflix and essentially, can we use your billing system? You charge users $5 extra for HBO and we provide the content.
I'd pay for that in an instant. Not really sure I'd do that for Starz, but I can see what they might have been trying for.

Never gone HD, I will when a tv breaks. Just hooked up netflix through the Wii and am very disappointed in the quality. Anything scfi looks like crap. Anything dark or shadowy is just black. Have decent cable Internet, maybe it is because the Wii is using wireless.
Anyone else have this problem with dark content?

I don’t have the Starz channels, even with my provider DISH Network. The price increase for the same amount of content with Netflix is what made me cancel. If they were going to raise the price, I wish they would have at least added more content! My provider and employer had come out with the Blockbuster Movie Pass at about the same time as the Netflix price increase so I tried it out. For $10 a month, I get DVD exchanges in-store and by mail, streaming to my DVR or computer, 20 channels on my lineup, plus video games and Blu-rays are included in any exchange (which Netflix always charged extra for, and didn’t have games)! I like being able to see movies almost a month earlier than Netflix. For now, the Blockbuster Movie Pass is only available to DISH Network subscribers, but since Blockbuster listens to customers, they are working on making the service available for those who don’t have a TV service. Blockbuster is a great alternative if you’ve recently cancelled Netflix too. Starz shouldn’t count on me subscribing any time soon.