Maffei: A Starz digital deal would uphold premium model

Streaming services from Netflix to Amazon may have varying business models, but in one respect they stand united: no separate tiers for content that require additional fees for consumers.

But that might change if Greg Maffei is correct. In an appearance Wednesday at the Merrill Lynch Bank of America Media Communications and Entertainment Conference, the Liberty Media Corp. CEO hinted the one-price-fits-all strategy could go away.

As he described his disinterest in any kind of deal for digital distribution of content from Liberty-owned Starz that doesn’t maintain its premium-channel status, he said, “I think over time you’ll see further and further tiering of some of the digital offerings that will become more compatible with how Starz is offered and how we’d like Starz to be offered in a digital world,” said Maffei.

Though Maffei likely won’t be the only making Starz’s next digital deal considering Liberty’s plans to spin off the company separately, which could set it up for acquisition, it was a revealing comment that could hint at changing strategy among any of the many streaming services that could be in position to scoop up the valuable Starz movie content that was locked up at Netflix until February.

The companies attempted to negotiate an extension on those digital rights, which included movies from Sony and Disney, but failed. Reports suggested Netflix balked at Starz’s insistence in negotiations that its programming be broken out on a separate tier, which would be unprecedented for the Los Gatos, Calif.-based company.

Netflix CEO Reed Hastings has talked of the value inherent in the simplicity of Netflix’s one-price-only offering, though the company has reversed course on other statements he’s made in the past. But it may be even more likely that Maffei was alluding to getting a deal done with any one of Netflix’s competitors, whether other subscription VOD market entrants including Hulu Plus, Amazon Prime and the upcoming Redbox-Verizon joint venture, or perhaps other digital content hubs including YouTube, Apple and Microsoft Xbox.

It’s also possible Maffei was hinting that a Starz tier could be in the offing somehow within the pay-TV ecosystem, perhaps in a model similar to what rival premium net HBO does with HBO Go, though that broadband-based product isn’t offered separately from the linear channel.

Maffei made it clear Starz wasn’t about to relax its standards. “I think there are a lot of digital deals that we could have,” he said at the conference. “The kind of digital deals that we seek is one that recognizes the premium nature of the business and is compatible as possible with our existing distribution scheme. We’re not interested in non-premium, non-tiered offering that is commoditizing both Starz’s and some of our content partner offerings.”

A Liberty spokeswoman did not respond to inquiry seeking clarification of Maffei’s comments.

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