Friday, September 2, 2011 at 1:18 pm.
Netflix: More subscribers than any cable company, growing the fastest, but still not Starz’ best friend
One of the reasons that Netflix and Starz couldn’t reach an agreement over extending their relationship is because Starz reportedly wanted Netflix to charge its subscribers more to access Starz content — via a premium tier — the way Starz’ cable partners do.
There are many reasons why Starz might have demanded that, from wanting to position itself as a premium video provider (like HBO; good luck with that) to wanting to show its cable and satellite partners that they are still Starz’ priority. Given that cable, satellite, and telco TV providers still represent the vast majority of video connections in the U.S., that might not be a bad idea, at least for now.
With 25 million subscribers, Netflix has more video subscribers than any single cable or satellite company. And having grown its customer base by almost 10 million over the past year, it’s growing much faster than any of them.
But combined, all the cable, satellite, and telco TV providers that I tracked still have about 80 million video subscribers, up almost 1 million from last year. Which means, for now, they may be in a better position to make Starz money than Netflix is — even if Netflix reportedly offered more than $300 million per year for Starz content.
Looking forward, it’s possible that Netflix will continue growing like crazy, and could eventually be a better potential partner for Starz than the slow-moving cable companies.
But Starz may also want to try reaching consumers directly someday. Thanks to platforms like the iPad and iOS, it’s never been easier for content owners to get their video in consumers’ hands — and even bill them — without going through a distributor or aggregator like Netflix or Comcast. (Starz is probably jealously looking at the HBO GO app, for instance, and wondering how it can do similar or better.)
Presumably, this is also eventually going to be possible on TVs, via connected TV platforms like Google TV, the Xbox and Playstation, and whatever Apple is cooking up. And then it gets really interesting for content owners like Starz.
Also: Apple: The next chapter