Back in October 2008, Netflix made a deal with Starz that allowed them to stream Disney movies instantly on the Internet. Netflix made out pretty well on this deal, but maybe a little too well.
Disney has decided to renegotiate terms with Starz. Originally, Netflix users were not required to pay a premium for the Starz movies, but now Disney is looking to make more money, hence the renegotiating. With this deal, Starz hopes to have access to Disney films for up to five years, including continued digital rights. What does this mean for Netflix? Well, in 2012, Netflix may lose some of its most viewed content when the contract expires. There is some talk of a new movie rental service, according to Disney Chief Executive Officer, Robert Iger. This may be the motive for the change, but many involved declined comment, including Netflix, who claims,
Netflix doesn't comment on other companies' negotiations.
Starz continues to stick to their claim that they do not want to come to an agreement that allow rights to be given back to the studio. Robert Clasen, the unit's then-chief executive officer stated,
We're certainly going to hang on to those rights as we move forward.
Netflix is the largest mail-order DVD rental service, with 12 million subscribers. So, although this may be threatening to the service, it doesn't appear that it will set the company back too far, but we'll have to see as the contract expiration date approaches.