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Starz Accelerating OTT Video Entry

2 Nov, 2015 By: Erik Gruenwedel

Look for Starz to enter the subscription streaming business in the United States on an expedited basis, according to CEO Chris Albrecht. The move comes after the premium channel and Encore lost 200,000 and 800,000 pay-TV subscribers, respectively, between the second and third quarters (ended Sept. 30).

Starz Play, the premium channel’s on-demand channel, is currently being tested in select international markets only as a subscription streaming service.

“It has become clear to us the importance of Starz unlocking opportunities to distribute our content beyond the traditional cable bundle, tapping into the unmet demand we are seeing for our content, while at the same time still cultivating our core business with MVPDs,” Albrecht said on the company's Oct. 29 fiscal call. “In the coming weeks, we plan to complete agreements with several new distribution partners.”

The executive didn’t disclose concrete plans; suffice to say it appears Starz’s foray into domestic OTT video would piggyback upon existing platforms such as Dish Network’s Sling TV, Charter’s Spectrum TV, PlayStation Vue or Time Warner Cable’s beta OTT video service. 

The aforementioned services, which cost about $20 monthly (except for Vue), include major broadcast channels, in addition to select pay-TV properties such as ESPN, Showtime, HBO, AMC, HGTV, CNN, TNT, TBS, Disney Channel, Lifetime and Discovery.

“We're looking at what [are] clearly numerous opportunities for Starz to be distributed in ways other than MVPDs, while still continuing to solidify and hopefully grow our business with the MVPDs … as these mergers are settled down. So there's a lot of factors at work there that are influencing the direction that we see ourselves going in the coming months,” Albrecht said.

The CEO downplayed analyst concerns that some multichannel video program distributors remain bitter about Starz’ former digital distribution agreement with Netflix — a pact critics say afforded the SVOD pioneer with less expensive access to third-party movies.

“The problem with the Starz-Netflix deal was that it was just ill-conceived from a cost perspective. That's not going to happen in the new distribution landscape,” Albrecht said.

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