Liberty Media CEO: Starz Seeking Digital Partner13 Sep, 2012 By: Erik Gruenwedel
Ever since Starz LLC unit Starz Entertainment in February ended a controversial four-year, $120 million distribution agreement with Netflix, it has sought replacement subscription video-on-demand partners — albeit with restrictions, George Maffei, CEO of parent Liberty Media, told an investor group.
Speaking Sept. 12 at the Bank of America-Merrill Lynch Communications, Media & Entertainment conference in Beverly Hills, Calif., Maffei said Starz does not want a repeat of the Netflix agreement for streaming rights to Disney and Sony Pictures movies, among other content, which has terms many observers felt were too generous. Indeed, Netflix buttressed its burgeoning SVOD business model on the Starz agreement — a renewal analysts say could have fetched as much as $300 million annually.
In addition to distributing third-party content, Starz also generates original programming such as “Magic City,” “Da Vinci’s Demons, "Titanic: Blood and Steel" and the “Spartacus” franchise, among others.
“The kind of digital deal we seek is the one that recognizes the premium nature of the business and is as compatible as possible with our existing distribution schemes,” Maffei said. “We’re not interested in a non-premium, non-tiered offering that is commoditizing ours and some of our content partners’ offerings.”
The CEO said the new SVOD partner would have to maximize — not minimize — the value of the third-party content, a strategy Starz employs with multichannel video distributors such as cable, satellite and telecommunications.
“I think over time you’ll see further and further tiering of some of the digital offerings and will become more compatible with how Starz is offered and how we’d like to see Starz offered in the digital world,” Maffei said.
Starz LLC, which is led by Chris Albrecht, is in the process of being spun off as a stand-alone business as Liberty focuses its attention on its stake in Sirius XM Satellite Radio, among other businesses. The latter reality has some wondering if Liberty wouldn’t be better off selling Starz.
Maffei believes Liberty has done a good job with Starz but would be willing to entertain third parties who he said might have greater synergies on the price, retransmissions or volume because they have distribution strength, multiple channels.
“There is always the possibility somebody could do better with the business [Starz] than we can, ultimately of higher value to them than it is to us,” he said. “We’re a long way down the road from somebody approaching us. I think Chris Albrecht and the team is doing a great job.”