Starz CEO: Our Choice Not to Renew Disney Pay-TV Deal4 Mar, 2014 By: Erik Gruenwedel
Chief Chris Albrecht says Starz opted to focus on original programming, which led to Disney’s landmark subscription streaming agreement with Netflix — set to begin in 2017
When Starz LLC and The Walt Disney Co. didn’t renew their pay-TV distribution agreement, which led to Disney’s landmark pact with Netflix, the prevailing view suggested Starz had let a major content provider walk away.
Not so, according to Starz CEO Chris Albrecht. Speaking to an investor group March 4 at the Morgan Stanley Technology, Media & Telecom confab in San Francisco, Albrecht said the decision not to renew with Disney was based more on a desire to focus on original programming and extend the brand than distribute Disney movies.
“Our authenticated platforms, Starz Encore and Movieplex Play, give us the kind of advanced attributes to our brands that consumers are looking for … [as well as] distributors looking to get into digital video,” Albrecht said.
He said the decision to move away from distributing third-party theatrical product (i.e. Disney), and more toward original episodic content, was a surprise to some of Starz’s multichannel video program distributor partners.
“It was our decision not to renew the Disney deal,” Albrecht said. “At that moment we had to say, ‘what is the future?’ And the future is clearly originals.”
Starz, which last year renewed a pay-TV agreement distributing theatrical releases from Sony Pictures, distributes theatrical releases from Disney, Marvel and Lucasfilm through 2016.
Albrecht said the advent of traditional distributors using technology to possibly delver content directly to consumers underscores the need to upgrade the Starz brand. The ability to get content to consumers at more advantageous price points (than via bundled subscriptions), Albrecht said, doubles down the value of Starz original content, including such shows as “Black Sails,” “The White Queen,” “Da Vinci’s Demons” and “Spartacus,” among others.
Remembering his days running HBO, Albrecht said revenue growth at Time Warner’s pay-TV subsidiary has not meant extending the channel overseas. Instead, he said, it’s been about altering distribution channels through technology.
“[Broadband channel] HBO Nordic took a fraction of the time to develop [compared] to the long-time pay-TV channels [HBO] had,” Albrecht said.
“The [Disney, Dish] deal is hopefully a harbinger of more effort going in that direction with new products, which are maybe [new] packaging of what’s been the historical video spec,” Albrecht said.