Starz Launching SVOD Service in Select Foreign Markets30 Oct, 2014 By: Erik Gruenwedel
Lack of proprietary and new releases from The Weinstein Co. drops home entertainment revenue and operating profit
As expected, Starz Oct. 30 confirmed it is launching a subscription streaming service in select international markets featuring proprietary programing. Starz Play SVOD is a partnership with Parsifal Entertainment Group, the Swedish consortium that helped HBO bow its first SVOD platform, HBO Nordics.
Pricing details and markets have not been disclosed. Starz Play SVOD will feature Starz's growing base of original programing, which includes the “Spartacus” franchise, “Outlander,” “Power,” “Black Sails,” “Da Vinci’s Demons,” “The Missing,” “Magic City” and “The White Queen,” among others.
“As demand for our content increases worldwide, we are providing subscribers multiple options,” CEO Chris Albrecht said in a statement.
IHS, in a research note earlier this month, said it expects that Starz Play SVOD will only launch in markets with little current Starz presence. This would mean the service likely would avoid the United Kingdom, where some of Starz's original programing is already available on Sky 1. In Poland and Hungary, Starz programing is broadcast by the local HBO channels, and in Italy by Sky Television.
“A branded OTT service offers a strong alternative to a broadcast channel in markets with low consumer demand for traditional premium channels,” Jon Payne and Tim Westcott wrote in the note.
At the same time, Payne and Westcott said launching a direct-to-consumer proposition programmed with Starz original content in markets currently offering Starz shows would likely mean forgoing the revenues brought in via these broadcaster deals.
“A risky move for Starz,” they wrote.
Meanwhile, third-quarter (ended Sept. 30) home entertainment revenue decreased $44 million to $73.5 million in large part due to no significant new releases from The Weinstein Co. or any Starz original series in the quarter.
Starz Distribution delivers original and third-party titles at retail and TV through subsidiaries Anchor Bay Home Entertainment, Starz Digital and Starz Worldwide.
Starz Distribution operating income decreased $6.6 million to a loss of $400,000 primarily as a result of the lower revenue. Cash paid for investment in films and television programs decreased $35.3 million to $29.4 million, due to timing of payments for previously released Weinstein titles.