Netflix Inc. is expected to strike a deal with Starz Entertainment, a move that expands the selection of movies available to Netflix subscribers for viewing on the Internet.The agreement between Netflix, of Los Gatos, Calif., and Starz, a subsidiary of Liberty Media Corp., will add about 2,500 movies, television shows and music concerts to Netflix's library of about 12,000 videos available for viewing online. Netflix has been cutting a string of deals intended to help it navigate a shift to online delivery of movies from physical DVDs, a transition widely expected to occur in the coming years.
The company's Internet service still lags far behind the more than 100,000 DVDs available through its traditional rental business, but in recent weeks it has cut deals with a growing number of partners, including the Walt Disney Co.'s Disney Channel and CBS Corp., to narrow the gap.
For Starz, which primarily distributes its premium channels over cable and satellite systems, the relationship is an effort to stay ahead of the growing appetite among viewers for video that is instantly accessible online. "I think we would all agree consumers will continue to expand their viewing of content over the Internet," said Bill Myers, chief operating officer and president of Starz Entertainment.
Under the deal, which is expected to be announced Wednesday, Starz will grant Netflix rights to show movies on its Internet service from the Hollywood studios owned by two big entertainment companies, Disney and Sony Corp. That includes everything from "Ratatouille" to "Superbad" to "No Country for Old Men." The first 1,000 of those videos are already available on the Netflix Web site with more titles appearing in the coming weeks.
Starz holds online viewing rights to movies from those studios that are shown as part of a subscription service, in which a consumer pays a monthly fee to watch as many videos as they wish. The movies will be available online free to people who are members of one of Netflix's unlimited subscription plans, which start at $8.99 a month.
The movies from Starz are part of an existing Internet service called Starz Play that the movie provider is seeking to make available through other partners. Its first partner, Verizon Communications Inc., offers Starz Play on its own for $5.99 a month.
By: Nick Wingfield
Wall Street Journal; October 1, 2008
