Netflix (NSDQ: NFLX) founder Reed Hastings told an investors conference Wednesday that he “can live without” renewing a deal for streaming rights from Starz, which deliver movies from Disney (NYSE: DIS) and Sony (NYSE: SNE). Talking up the growth of TV on his service, Hastings is essentially signaling Netflix is now just as much a TV service as it for movies–if not more so.
“It is not essential to our success,” Hastings said at the Barclay Global Technology conference in San Francisco (audio here).
As Netflix transitions its business from snail mail to streaming, the Starz deal has been seen as a crucial piece of the puzzle. BTIG Research analyst Richard Greenfield has written a few times about the “must have” Starz deal, which is scheduled to expire in October 2011, because it was responsible for “50% of its freshest movies.”
Given speculation that Netflix would have to pay nearly 10 times the $30 million it paid, taking the negotiations public may be Hastings way of getting the price down.
“The Starz deal turned out to be a great deal for us,” said Hastings. “We’ll try to renew it. But there’s no one piece of content that’s central for us.”
He drew a parallel to Showtime Networks moving on without its core movie supplier Paramount Pictures a few years ago–though Showtime has since built up a robust roster of original programming, a direction Netflix has indicated it has no interest of going.
Ironically, he noted that without a new deal with Netlix, Starz CEO Chris Albrecht could find himself without the funding that would help him invest in original programming for the brand.
But Hastings described TV as a “big expansion for us,” noting that in the broader media universe, TV consumption dwarfs that of movies. “We’re just catching up,” he quipped, suggesting that movies are just a base on which Netflix is building.
Netflix has also been aggressive about adding to its TV content library, signing a slew of new deals. Just today Netflix signed a broad deal with Disney-ABC Television Group, and already has a deal of similar scale with NBC (NYSE: GE) Universal’s broadcast and cable channels.
Netflix spent $1.2 billion on securing streaming rights this year, according to the company’s filings.