AT&T Inks New Deal With Lionsgate, Starz22 Sep, 2016 By: Erik Gruenwedel
Agreement includes Starz participation in pending online TV service DirecTV Now
AT&T has signed a carriage deal with Lionsgate and Starz, which includes the latter’s inclusion in the pending online TV service, DirecTV Now. Lionsgate is offering content via transactional VOD, digital sellthrough and pay-per-view.
Select details of the Sept. 17 pact were disclosed in a Starz regulatory filing.
Notably, the extension for Encore and Starz premium channels includes a price cut that Starz hopes to offset by offering content to DirecTV Now, which could launch by the end of the year.
"This makes the online growth in the new Amazon/Starz deal sound impressive,” Barton Crockett, analyst with FBR & Co., wrote in a note reported by The Hollywood Reporter.
Starz is marketing a standalone SVOD service through Amazon Channels, a platform (formerly called Streaming Partners Program) enabling third-party OTT video services to market themselves to Prime members.
In addition, Lionsgate has agreed to make AT&T an equity partner valued at $16.67 million annually following completion of the Starz/Lionsgate merger. The equity stake, which would be derived from Starz Networks revenue, could be converted to cash payments at Lionsgate’s discretion.
Payments would terminate should Lionsgate’s $4.4 billion acquisition of Starz fall through.
In a statement, AT&T called the deal “a win” for subscribers who would be able to watch Starz content across all AT&T platforms.
“With the Starz and Lionsgate announcements, we continue to build a robust programming line-up for our new DirecTV Now platform, [which] includes … Disney, HBO, Discovery Networks, NBC Universal, Turner and Scripps Networks."