Five months after announcing its intentions, US cable and satellite pay TV network Starz has unveiled its direct-to-consumer OTT offering. The company undoubtedly hopes this launch will go better than its failed venture, which saw it fail to launch one of the first OTT offerings in the market. This is a move to expand beyond the boundaries of the pay TV networks, and embrace the OTT future of cord-nevers and cord-cutters.
The new product is available on iOS and Android devices, including Apple TV and Google Chromecast, as well as through web browsers. A monthly fee of $9 allows up to four users to watch content simultaneously. Starz also says users can download “virtually unlimited” content to watch on the go.
It gives access to more than 2,400 selections, including popular series Outlander, Power, and the soon to be released American Gods, as well as successful Hollywood movies Avengers: Age of Ultron, and Star Wars: The Force Awakens, which will be available later this year.
Following Starz’s OTT flop of 2006, the network was then responsible for licensing bags of Disney and Sony content to Netflix. At the end of that contract, both Disney and Sony insisted, under volume terms in their contracts, that they would have a direct relationship with Netflix, which resulted in Starz being cut out of the OTT revenue chain. Starz CEO and ex HBO executive Chris Albrecht has cited this as a pivotal moment in assisting the launch of Netflix.
Starz then tried to ignore the OTT ecosystem entirely and focused on selling its channels to cable TV operators, but it couldn’t carry on doing this forever, and has now finally decided to enter the direct to consumer arena.
Starz has recently overtaken Showtime to become the second placed premium TV network in the US, leaving only HBO in its path. Showtime has 23.4 million subs, and HBO has 32.5 million subscribers on various cable and satellite pay TV packages, but its SVoD service HBO Now has only racked up some 800,000 subs since it launched in April 2015.
In comparison, Starz has 23.6 million subscribers, and its Encore network has 32.2 million – giving it a total of 55.8 million subscribers in the US, as of the end of 2015, down from 56.9 million in 2014. However, with Game of Thrones Season 6 hitting screens at the end of this month, HBO Now’s subscriber figure is expected to increase substantially.
What Starz certainly lacks is its very own globally successful series that is a household name for all generations – as it stands, Starz lacks the personality and identity that Game of Thrones gives HBO. Without serious investment in an original content library, that’s a fact that’s likely not to change.
Overall, Starz has 17 linear networks, with 3 on-demand offerings and 3 SVoD offerings – Starz Play, Encore Play, and Movieplex Play. It has library programming agreements with Warner Bros, Twentieth Century Fox, MGM, Sony Pictures, Universal, Paramount, Miramax, Lionsgate, and The Weinstein Company – which owns a 25% stake in Starz.
Starz, which was spun-off from Liberty Media into a separate public company in 2013, reported 2015 revenue of $1.7 billion, up 2% from $1.66 billion in 2014, but still down from its $1.78 billion revenue in 2013. It also has debt of around $1.04 billion.
The businesses and assets of Starz consist of Starz Networks – which includes Encore and Movieplex – and Starz Distribution, which includes Starz Digital, Starz Worldwide, and Anchor Bay Entertainment. Starz also holds a minority stake in Arc Productions.
“Starz has entered the market today with an enormous value proposition for consumers. Our programing will now be more widely available to the 20 million broadband only homes of cord-nevers, cord cutters and cord shavers, including millennials and other underserved consumers who need other viable subscription service options,” said Albrecht.
He added, “with the growing consumer appetite for our highly-rated, award–winning and diverse original programing and vast library of movies, our elegant and powerful app is the first in the industry to allow download capability to watch premium content anytime, anywhere, without the need for WiFi access.”
Last week, Starz also announced it will undergo rebranding and a reprogramming of its Encore channels, now called Starz Encore – it says this will create a unified look and feel, and strengthen its product offerings.
Early last year, Starz Play expanded outside of the US for the first time with the launch of Starz Play Arabia in 17 countries across the MENA region: Bahrain, Saudi Arabia, Kuwait, Oman, Qatar, United Arab Emirates, Algeria, Djibouti, Egypt, Iraq, Jordan, Lebanon, Libya, Mauritania, Morocco, Palestine, and Tunisia.
In October 2015, a multi-year content licensing output was agreed by C More Entertainment, Starz Digital, and Starz Worldwide Distribution, providing C More with exclusive first-run SVoD and pay TV rights across the Nordics. Making Starz Original content available in Sweden, Norway, Denmark and Finland.
Meanwhile, it was reported back in February that talks between Starz’s controlling shareholder John Malone and Lionsgate about a possible merger or takeover had stalled, following share prices of both companies falling over 20% in the last year.