LOS ANGELES (Reuters) – Starz Entertainment will pull its movies and shows from Netflix Inc starting next February, after talks on renewing a streaming agreement between the pay-TV operator and popular Internet video service fell through.
Pay-TV operator Starz, controlled by John Malone's Liberty Media, said on Thursday it will stop distributing content from major studios such as Walt Disney Co and Sony Corp through Netflix when the current deal expires in February 2012.
It called the decision "a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging" of its content.
Netflix was not immediately available for comment. Its shares plummeted almost 11 percent to $208 in after-hours trade, from a close on the Nasdaq of $233.27.
According to the StarzPlay section of netflix.com, the service carries about 1,000 movies, original series and other content from Walt Disney Pictures, Sony Pictures Entertainment and Pixar, among others.
Starz is the exclusive distributor of first-run Sony and Disney movies on pay-TV in the United States under an agreement that allows it to distribute the programing wholesale on multiple platforms, including online streaming.
But Netflix -- which has grown faster than partners expected -- triggered a deal clause in the first quarter when it announced it now has more than 22.8 million subscribers in the United States, of which nearly two-thirds were streaming videos, sources told Reuters in June.
Under terms of the original contract, the trigger allowed Sony to ask Starz for better financial terms, the sources had said.
(Reporting by Lisa Richwine, editing by Matthew Lewis)
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