What does this mean? Well, if you believe what Starz is proclaiming, as of February 28, 2012 -- i.e., about 6 months from now -- "Starz will cease to distribute its content on the Netflix streaming platform." And, that would be a body blow to Netflix ... and to Netflix customers like me who already find slim pickens.
To add insult to injury, Starz's announcement came on the same day -- yes, SAME DAY -- as Netflix's recently announced price hikes went into effect. Coincidence? I think not!
And, that's the point. Starz is playing Netflix big time. First, they shoot to thrill by issuing this press release concurrently with Netflix's hugely unpopular pricing move (which I actually applauded a few weeks back in this blog post). Next, they drop the "T" bomb -- as in contract termination. Doesn't get much scarier than that!
But, people, this is all just a big game -- the oldest negotiation game of them all. Throw up your hands. Storm out of the room. Walk away! But, are you really walking? Of course not! You simply want more more more! Starz's intentions here are incredibly obvious and transparent -- IT ISSUED A PANIC-INDUCING PRESS RELEASE AFTER ALL! Think about it. If Starz really were walking and not looking back, would it really feel the need to announce that to the world? Of course not! But, if you simply want more and more stacks of cash and want to induce panic in the boardroom of one of the most closely-watched publicly-traded companies, that's precisely what you do!
But, here's the trick to pull off this type of Starz negotiation move successfully ... listen very closely ... YOU MUST HOLD THE CARDS! You can only walk (or feign walking) from a negotiation if (a) you really are done (which is not the case here), or (b) you know that the other side absolutely needs to make a deal (which is absolutely the case here).
Bottom line -- Netflix needs premium content to bring value to its service. Without it, Netflix is nothing. Netflix knows it. Starz knows it. All of us know it. After all, content is still king ... and always will be.
So, what's a Netflix to do? It's really quite simple. Open up its wallet and say "ahhhhhhhh!" That "ahh" will represent a gag reflex for Netflix, and a deep sigh of satisfaction for Starz. Remember, it's not as if Netflix has other alternatives, because every single purveyor of premium motion picture and television content in this brave new world of digital distribution will demand the same. And, Netflix can't be all about old Scooby Doo cartoons (as much as I like Shaggy). Subscribers like you and I want some good old-fashioned movies from this century too.