Last week we got some compelling news in the world of OTT that Netflix and Starz are going their separate ways. I was a bit surprised in the news, but know that Starz will find a new outlet. After all, they’ve been in the Cloud long before that term was coined. It got me to thinking – If Starz wants to step up there game, what would happen if they turned around and raised the capitol to buy Hulu?
What is Starz?
Starz is a company based in Colorado. They operate other premium channels, such as Encore, Indieplex and Retroplex. The company was owned by “Liberty Media”, but was split off in 2009.
Like I said – Starz has been in the cloud long before the term was coined. I remember back in 2005, I was working for the State of Wisconsin and travelling 70% of the time around the state. When I stayed at hotel rooms (some without wifi at that time), I needed to make sure I had things to do.
At that time, Starz had movies on Real player. You would download the 500 MB movies and had 48 hours to watch them before the DRM kicked in. So I could chose from many titles and watch them if there was nothing else to do.
Starz on Netflix
When I found out Starz was on Netflix, that made my decision to go back to that service an easier one. Having the Starz channel on stream is a pretty nice option. Especially now since Starz is getting into more original programming (like Spartacus and Torchwood series).
One of the reasons Netflix says the renewal failed was that Netflix expects Starz viewing to drop to 5-6% come January. They attribute this to the many great titles from Lionsgate, Paramount, MGM and others. Little did they say they lost 50% of Starz movies (including newer releases and blockbusters) when they couldn’t work out a deal with Sony. So in retrospect, Netflix would actually not be worth Starz time since you couldn’t see half their movies anyway.
Now, with the split between Netflix, I feel this is an opportunity for Starz to take a new direction. Since they’ve been doing OTT the longest, why not go all the way and purchase that Los Angeles based company?
If Starz Bought Hulu, The OTT Premium Channel Would be Born…
First, nothing would need to change. There is technically no competition issues since Starz doesn’t own any other cable channels. Starz would get a bigger library and could offer Starz and Encore in the HuluPlus package (for an extra few dollars per month, get a premium channel).
Starz OTT Coverage
I know what you are thinking. We have HBO Go and other web-based premium channels. That is kind of true, however, they are on limited amount of set top boxes and you still have to pay for the cable channel to get the web content.
HuluPlus would instantly be on Boxee, Roku, WD TV and various Blu-Ray and TV solutions. Therefore, Starz would have instant household coverage. Add in new set top boxes as they go, by 2014 (when the OTT is suppose to boom), Starz would be in a perfect spot.
Yes, Starz Doesn’t have to Buy the Hulu Farm to be on it…
Starz could easily approach Hulu and work out a deal which would give Hulu the first premium channel without the cable clause attached. But that would mean Starz has to play with whomever buys Hulu. So why not get the whole farm and be the farmer?
Partnerships with Starz
Of course, something like this would only be possible if all companies stay on board. If Starz loses contracts over a purchase like Hulu, then it would be in their best interest not to buy. But if all works out, Starz could be not only competing with Netflix, but also Blockbuster, Redbox, Amazon and more.
They would have TV shows before the season was over. They could also gain more movies for their premium channels. It’s a big bite, but if Starz is up to the challenge, it would be an interesting start to people “cutting their cords” and going through an Internet-based Over the Top Television solution.