Courtesy of Karl Denninger, The Market Ticker
It turns out that ISPs aren’t the only ones tired of Netflix getting more than they bargained for. Starz is too.
SAN FRANCISCO (AP) – Netflix’s negotiations to keep a key piece of its Internet video library have collapsed, dealing a major blow to the largest U.S. video subscription service as it raises the prices for most of its 25 million customers. The setback triggered a 9 percent drop in Netflix Inc.’s stock price late Thursday.
Starz Entertainment delivered the bad news in a terse statement announcing that it won’t renew a contract that allows Netflix to show a lineup of recently released movies and TV shows over high-speed Internet connections.
Of course the real problem is price, as always. Nobody will just walk off if the numbers are right, so they clearly aren’t.
This bodes very ill for Netflix, which up until now has managed to "more or less" fight off the problems with ISPs by arguing that their customers paid for "X" and want "X" and therefore should get "X".
It’s a BS argument when you’re running a service that consumes 10x the bandwidth that the network was provisioned for and the provider assumed when he sold the service, but heh, who cares about those tiny details.
This, however, coming from the content side, is an entirely different kettle of fish, and there’s no convenient way for Netflix to get out of the trap either.
I am making an assumption in this, of course: This is a real "walk off" and not a negotiating tactic.
It might be.
But if it’s not then the "$8 all you can eat" video buffet just ran out of food.
