LOS ANGELES — Premium cable network Starz Entertainment will end its deal to provide movies to Netflix, a surprise decision that will deprive the popular online-video service of its most valuable source of recently released movies.
Analysts had said that if Starz were to renew its agreement, which expires in February 2012, it could have been worth as much as $300 million to John Malone’s Liberty Media-owned network.
But executives at Starz apparently concluded that they would lose even more money by giving consumers a reason to subscribe to Netflix instead of the cable channel.
“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,” Starz said in a statement Thursday. “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.”
Starz, which controls pay-cable rights to movies from Walt Disney Studios and Sony Pictures, signed its current agreement with Netflix in 2008. At that time, online video was watched by only a small number of tech-savvy young people, and the estimated $30 million per year the cable network received was seen as new revenue that would have little impact on its traditional television business.
But Netflix now has 25 million subscribers, the majority of whom watch video online .
