Starz and Netflix deal ends

Nancy Marshall-Genzer Feb 29, 2012

Jeremy Hobson: Now to another online company making changes. Starting today, Netflix is ending its deal with the movie channel Starz. That means the more than 1,000 movies Starz offers — from “Teen Wolf” to “Toy Story 3” — won’t be available on Netflix.

Marketplace’s Nancy Marshall Genzer joins us now live to talk about the broader implications of this. Good morning, Nancy.

Nancy Marshall-Genzer: Hey Jeremy.

Hobson: So if I’m not a big fan of “Teen Wolf,” why do I care about this?

Marshall-Genzer: Yeah, I’m not either. Jeremy, it is important though because Starz was providing new-release movies to Netflix. Most people think access to the big-name Hollywood blockbusters is key to Netflix’s success. But turns out, that’s actually not the case. Netflix customers weren’t watching that many movies from Starz anyway.

Ken Doctor is a media analyst for Outsell and Newsonomics. He says more than half of what people are streaming from Netflix are TV shows — and Netflix has a big TV library.

Ken Doctor: So they have been bulking up on TV shows that people like. So they’re in a race to replace as much of those movies as they can. At the same time, they’ll continue to negotiate with the movie studios.

Hobson: So Nancy, is the future of these streaming video companies like Netflix more TV than film?

Marshall-Genzer: They’re actually going to follow the HBO model. HBO of course has been successful by creating its own shows, which it can control. So there’s no wrangling with Hollywood over access to and payment for movies. And Netflix already has one original series, it’s called “Lillyhammer.” And we’ll see how it does.

Hobson: And I’ve heard that they are going to bring back “Arrested Development,” which is very exciting for me. Marketplace’s Nancy Marshall Genzer, thanks a lot.

Marshall-Genzer: You’re welcome.

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