Analyst: Starz Likely to Stay On Netflix, But at a Much Higher Cost
BTIG analyst Richard Greenfield predicts a deal will get done, and ahead of schedule, to keep Starz on Netflix. But he also predicts the cost to Netflix will increase by more than 8 times, growing from $30 million annually to an average of $250 million a year annually. Greenfield believes Starz would get to pocket upwards of 2/3rds of the rights money but have to share the rest with Disney and Sony.
Greenfield views Starz as a must-have for Netflix, though concedes one advantage of not doing a deal with Netflix would be better relationships with service providers like Time Warner Cable.
But ultimately, Greenfield believes Netflix will make Starz an offer it can’t refuse and looks for a deal to get done to extend the relationship by early 2011. The current deal doesn’t expire until October 2011.
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