Deal commits cable operator to two new nets
John Malone’s Starz Entertainment Group plans to funnel more than 1,500 movies a year to a free video-on-demand service set up by Comcast, the biggest cable operator in the U.S.
The deal extends Comcast’s contract with Starz and its Encore sibling and all of their multiplex movie networks into the next decade and commits Comcast to take two new Starz movie networks down the road. Starz and Encore also will get better placement on many of Comcast’s cable systems, said Robert Clasen, president-CEO of Starz Entertainment.
Some of the VOD movies, including recent ones like “The Incredibles,” “The Village” and “National Treasure,” already are available to Comcast digital subscribers who buy Starz separately. Encore will take library pictures like “Con Air,” “Mad Max,” and “The Prince of Tides” and create an on-demand service separate from Starz.
Starz will draw on recent-title output deals with Walt Disney and its various movie divisions and with Columbia Pictures and its movie siblings, such as Revolution Studios, Screen Gems and Sony Pictures Classics. By contrast, Encore buys older movies from every studio. In all of these movie negotiations, Clausen said, Starz and Encore negotiate VOD rights to the titles.
For Comcast, the arrangement fits in with the company’s gung-ho desire to offer volumes of free VOD programming to its subscribers, particularly movies, which surveys show are among the most popular on-demand programming.
VOD could end up as one of the killer applications that keep Comcast subscribers from canceling cable to buy a satellite dish or to buy a competing cable-type service from SBC and Verizon, two phone companies that have already created inhouse divisions to offer packages of program networks to their customers.
In total, Starz and Encore will deliver about 325 movies a month to Comcast’s VOD service when the blueprint takes effect later this year. Already, Comcast subscribers who pay a monthly fee to buy Starz get an average of 75 movies in the Starz on Demand window.
What’s new is an additional 250 VOD titles a month to be set aside by Encore for Comcast subscribers who buy the Digital Plus package of networks (including seven Encore channels) for $14.95 a month.
Page Thompson, VP and general manager of Comcast on Demand, said once the Encore package becomes available to Comcast customers, they’ll end up with more free movies on demand to choose from than with any other cable operator. That’s because Comcast began earlier this year an exclusive on-demand service called MoviePass, consisting of 50 library titles a month from Columbia Pictures.
Comcast got access to the Columbia inventory by helping Sony Pictures buy MGM. Thompson said MoviePass, which is free to Comcast’s digital subscribers, soon will be on the receiving end of a flow of movies from the 5,000-title MGM library.
Executives from other movie companies say Comcast has approached them to buy library titles for MoviePass, so it soon may be displaying as many titles as Encore’s on-demand service.
Clasen said over the past five years, both Starz and Encore have shown growth in the Nielsen ratings, and each network is gaining more subscribers. Encore, he said, reaches about 25 million people and Starz about 14 million.