Netflix Losing Streaming Content From Starz Entertainment

Netflix offers subscribers instant access to movies and TV shows through online streaming, which is quickly replacing DVDs-by-mail, the company's original service.  

But a lot of the streaming selections are old, third-rate ... or both.  Much of the newer, better content comes  from Starz Entertainment. Now Starz has announced it is ending its affiliation with Netflix at the end of February.

The two companies had been in contract renewal negotiations late last month, but Starz, LLC, President and Chief Executive Officer, Chris Albrecht says those talks are over.

“When the agreement expires on February 28, 2012, Starz will cease to distribute its content on the Netflix streaming platform,” Albrecht said.

It's not clear that the talks broke down over Netflix' offer. The video rental company had offered a reported $300 million to renew the agreement. Rather, Starz apparently broke off over the talks over the relatively small amount of money Netflix charges consumers for its service.

Too much value for consumers?

“This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content,” Albrecht said. “With our current studio rights and growing original programming presence, the network is in an excellent position to evaluate new opportunities and expand its overall business."

Netflix charges consumers a flat $7.99 a month for unlimited streaming of its video content. That is well below the price charged by cable and satellite TV providers, who are also Starz customers.

The loss off the Starz contract leaves Netflix with a gaping hole in its streaming content, but the company doesn't appear to be worried.

“We’ll take the money that we were going to spend on Starz and spend it on other content,” Netflix spokesman Steve Swasey told AdWeek.

There have been suggestions that Netflix might begin producing original content, much like HBO and other prime-tier cable channels.