Starz is just getting started with its broadband business. The deal this week with Netflix, and an earlier one with Verizon, are only examples of how the cable channel might make its programs available to consumers over the Internet, says Eric Becker, a Starz spokesman.
I spoke with Becker after he sent a note explaining that Starz doesn't set the pricing on its deals with what he calls "affiliates." So don't blame Starz for what I called an "odd" option of getting Starz-only titles for $8 a month. It seems strange because $1 more gets access to six times as many Netflix streaming titles, plus a mailed DVD each month.
Becker also said we shouldn't look at Starz shuttering its own download service, called Vongo, as a setback. The company jumped to the cutting edge with its download service, one of the first to offer Hollywood flicks, when it launched in 2006. He said it was sort of a proof-of-concept venture that isn't needed anymore.
"Now our affiliates are much more ready to get into the business themselves," Becker said. Starz has no particular desire to be in the business of directly serving consumers, with all the headaches of billing, customer service, and tech support.
Launching Vongo also led to "spirited" discussions with Starz's main customers, the cable and satellite companies that pay to carry the company's channels. Some clearly saw it as competition for their consumer service.
But Becker predicted that at least some will also offer the Starz broadband service. Cablecos could charge customers more for the service, or make it part of a premium package, or simply add it to cement customer loyalty.
In other words, cable and satellite companies can't stop Internet downloads. So why not join them?