Netflix Picks Starz's Online Movie Service

9/30/2008 6:01 PM Eastern

Netflix inked a three-year agreement with Starz Entertainment to offer about 2,500 additional movies—bundled into Netflix’s unlimited monthly subscription plans—through the Starz Play broadband movie service. 

The Starz broadband service includes movies from Walt Disney Co. and Sony Pictures Entertainment such as Spider-Man 3, Ratatouille and No Country for Old Men. That content will augment Netflix’s Internet video on-demand service, which currently provides 12,000 movies and TV episodes. In addition, Netflix subs will be able to watch a live feed of the Starz TV network on their PCs.

Financial terms of the deal weren’t disclosed.

Netflix already offers virtually all of the content available on Starz Play through its core DVD-by-mail service, which offers a selection of more than 100,000 titles.

“We’re not giving them any major new titles,” Starz president and chief operating officer Bill Myers said in an interview. “What we’re doing for their customers is giving them a way to access those titles over the Internet.”

The deal is Starz’s second for the broadband movie service after signing Verizon Communications, which offers the Starz Play online movie service to its 8.5 million broadband customers for $5.99 per month.

Starz last month scrapped Vongo, its consumer-facing Internet movie service, in favor of focusing on landing distribution deals with cable, telco and Web providers.

Initially, Starz will offer about 1,000 titles through Netflix, accessible by clicking on the “Watch Instantly” tab on the home page. The companies expect to add more titles will be added in the coming weeks. Netflix also will offer a Starz Play-only subscription for $7.99 a month.

In a promotion tied to Starz’s original series Crash, starting on Wednesday Netflix subscribers will be able to access a preview of the first full episode of the show in advance of its Oct. 17 linear TV premiere on Starz.

Netflix offers subscribers a way to access the streaming service from their TVs—using the $99 Netflix Player by Roku, as well as a forthcoming Blu-ray Disc player from LG Electronics.

But Myers said the intent with Starz Play is to offer a broadband viewing experience, which doesn’t compete with the high-definition and video-on-demand offerings for traditional affiliates.

“The services that we provide cable, satellite and telco are much more robust than Starz Play,” he said. “It’s not a replacement product by any means. It allows us to get to customers who may not get Starz content in other formats.”

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