September 02, 2011 08:11:44 GMT
The pay cable channel will stop supplying the online streaming service with movies and TV series starting March 2012 because negotiations to renew their deal have ended.
Starz's distribution deal with Netflix will end next year. The pay cable channel has said on Thursday, September 1 that it will not renew its agreement with the online streaming service, which began in 2008 and will end on February 28, 2012, after their talks fell apart.
Words are, Netflix had offered $300 million per year to renew their agreement, which is ten times more than Starz had obtained from their initial deal. However, the premium cable channel reportedly also wanted consumers to pay more.
"This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content," Chris Albrecht, the chief executive of Starz, explained the reason.
Netflix's stock has since dropped about 8 percent in after-hours trading Thursday, but the company is still "grateful for the early notice" because it will "give us time to license other content before Starz expires."
Noting that the network's content had become less vital to its service over time, Netflix added, "We are confident we can take the money we had earmarked for Starz renewal next year, and spend it with other content providers to maintain or even improve the Netflix experience."