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Starz CEO: Amazon Has Become a Digital Affiliate

9 Jun, 2016 By: Erik Gruenwedel

Starz last December bowed a subscription streaming service on Amazon Prime’s upstart Streaming Partners Program — a platform for third-party streaming services marketed to Prime members.

Fast-forward six months and the e-commerce behemoth is helping expand the Starz brand deep into the over-top-video ecosystem, according to CEO Chris Albrecht.

Speaking June 9 at the Gabelli 8th annual movie & entertainment conference in New York, Albrecht said the Amazon relationship underscores a changing media landscape whereby content distributors must meld traditional multichannel video program distribution with OTT.

Starz, which distributes Sony Pictures movies and select independent titles, in addition to its own original TV shows, across 17 pay-TV channels, in April launched an app for the $8.99 monthly OTT service.

“The Amazon relationship is much more like a distributor. There’s a buy-through — in this case Amazon Prime — and they’re selling, for a separate price, Starz. We look at that as accretive to our business. And very consistent with what we’re doing with the rest of the MVPD business,” Albrecht said.

The executive said Starz is being marketed to third-party digital platforms as either distribution or revenue sharing.

“Amazon in a sense has become a digital affiliate of Starz, where we have a rate card with them, and more of a traditional business model. With Apple TV, we have a revenue-sharing agreement.”

Albrecht said entering into third-party agreements similarly to Amazon would be dependent upon whether they enhanced the Starz brand.

“I’m not sure how many more wholesale distributors we’ll have on the OTT side.”

In the traditional premium TV space, a Starz Encore rebranding effort now enables the company to market original content to more than 34 million pay-TV households.

“We can now justifiably put the previous seasons of shows on the air and use … Encore has a promotional base for the new season of 'Power' or 'Black Sails.'”

When asked if the Amazon agreement is more advantageous to Amazon, Albrecht said the relationship is very different than the previous pact with Netflix.

The CEO said the problem with the Netflix pact (which ended in 2012) was that for a very low price, the SVOD pioneer got digital access to third-party movies, while in return there was little upside for Starz. He said renewing the distribution deal probably would have driven Starz out of business.

“If [Netflix] would have offered us as a tier option on top of their basic streaming package, we probably would have made a deal with them. And it might have been good for both of us,” Albrecht said.

Indeed, the executive questions why someone would pay for Epix — the multiplatform premium network co-owned by Lionsgate, Paramount Pictures and MGM — when its slate of movies is available on Hulu and Amazon Prime.

“To me, someone selling your brand, marketing your brand, and paying you per-subscriber or rev-share, is very different than saying, ‘here, take all my stuff,’” Albrecht said.


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