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Starz Eyeing Branded SVOD Platform for Pay-TV Operators

25 Feb, 2015 By: Erik Gruenwedel

CEO Chris Albrecht says distributor should get 'Avengers: Age of Ultron' and 'Star Wars: Episode VII' as Disney license deal nears end

With a business model predicated on distributing movies and original episodic programming to third-party pay-TV operators, Starz has no interest in sacrificing those relationships by going direct to consumers via over-the-top video.

At the same time, Starz CEO Chris Albrecht said the distributor understands the emerging market trends of OTT video and subscription streaming. As a result, Starz recently bowed Starz Play International, a SVOD service aimed at distributing original content in foreign territories.

Speaking Feb. 25 on Starz’s fiscal call, Albrecht said he envisions marketing a version of Starz Play International to domestic pay-TV operators going forward.

“Whether or not new well-qualified [pay-TV] distributors come in that make us offers that we think are worthwhile considering, I think the experience of Starz Play International can't hurt. I think it certainly is a model that we can replicate in other territories and regions,” Albrecht said.

But he cautioned that any domestic branded SVOD service would have different content offerings because Starz doesn’t have the SVOD rights to third-party movies it licenses outside the United States.

With its Disney domestic movie distribution deal ending in December — and taken over in 2016 by Netflix in a landmark 2013 SVOD agreement, Albrecht was asked if Starz would still have pay-TV access to Disney’s two major 2015 theatrical releases: Avengers: Age of Ultron (launching May 1) and highly-anticipated Star Wars: Episode VII, which hits theaters Dec. 18.

It was a good question considering the apparent animus Albrecht has voiced about Netflix and SVOD in general in the past. During last quarter’s fiscal call, Albrecht criticized Starz’s distribution deal with Netflix that ended in 2012. 

Critics contend Netflix woefully underpaid for Starz content it used to jumpstart a pioneering subscription streaming business model in 2008. While Netflix likely paid market value for content in a nascent (streaming) distribution channel no one understood or appreciated at the time, Albrecht didn’t like it.

“Look, Starz made a terrible deal with Netflix. You could argue Netflix built a lot of its business on the back of Starz programing,” he said in December.

Fast-forward two months and the CEO admits his comments were off-the-cuff and ill-advised. Indeed, Starz has licensed catalog content no longer in production to SVOD services.

“Right now with the release dates that [Disney has] announced, those films will fall onto the Starz output agreement,” Albrecht said.

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