Those relationships will get another test in 2011 as Netflix and a few media companies renegotiate their carriage agreements. Netflix has to renegotiate its agreements with and Starz, which allows Netflix access to Sony and Disney movies.
The original deal from 2008, in which Netflix paid an estimated $25 million annually, is seen by some in the content business as a mistake, given the discrepancy between what cable, telco and satellite companies pay Starz for carriage rights. That means Netflix content acquisition costs are set to rise.
The original deal from 2008, in which Netflix paid an estimated $25 million annually, is seen by some in the content business as a mistake, given the discrepancy between what cable, telco and satellite companies pay Starz for carriage rights. That means Netflix content acquisition costs are set to rise.
Over the long term, Netflix viability as a provider of streaming content will be shaped by those costs.
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