Comcast and Lionsgate have set a complex deal that calls for a significant shift in carriage terms for Starz after the “Power” series finale airs in February.
Comcast and Lionsgate had been publicly sparring over carriage negotiations for Lionsgate’s Starz premium channel group, sparking anger from fans of the long-running crime drama that is set to launch its final five episodes starting Jan. 5. The sides had been facing a Dec. 31 deadline on their most recent short-term carriage extension.
The transaction unveiled Monday calls for Comcast’s NBCUniversal to license a raft of content from Lionsgate for the upcoming Peacock streaming service, while Lionsgate will do the same with NBCUniversal content for its various international Starz digital platforms.
But the more unusual part of the agreement calls for Comcast to transition Starz to an a la carte offering after the “Power” finale airs on Feb. 9. That means Starz will no longer be bundled as part of a premium offering with HBO and Showtime, so viewers who want to purchase Starz via Comcast will have to seek it out as an add-on to existing cable service.
“We are pleased that we were able to extend the partnership to Peacock and other businesses within Comcast while also ensuring Xfinity customers continue to enjoy great Starz programming,” said Dana Strong, president of consumer services for Comcast Cable.
Lionsgate CEO Jon Feltheimer has been preparing investors for the transition. Lionsgate argues that the shift will improve Starz’s financial underpinnings by delivering high-margin customers. But the untethering from the cable bundle to go it alone as a subscription offering is still an unchartered process for Starz and other premium cable brands. Comcast’s move will surely spark other MVPDs to consider an a la carte option as carriage contracts with Starz and other traditional pay-TV channels come up for renewal.
“Rather than watching our traditional business ratchet down with each new unwinding of the television bundle, we’re embracing the realities of the evolving marketplace, collaborating with our linear partners to grow our respective businesses, and transitioning our customers on an innovative and orderly path to an a la carte environment together… at the right time, the right price and in the right way,” Feltheimer said in November on a quarterly earnings call with analysts.
Earlier this month, Comcast dropped 11 of Starz’s 17 channels, including themed channels such as Starz Comedy and Starz Kids and Family. Those channels will not be restored by the new deal although VOD content from those channels remains on Comcast’s platform.
In announcing the agreement, Comcast and Starz made only an oblique reference to the shift, noting that the deal allowed the sides to find “a path for an orderly transition to an a la carte business.”
“We look forward to continuing our longstanding partnership with Comcast to deliver great content and great value to our customers,” said Starz president-CEO Jeffrey Hirsch. “Our ongoing relationship with Comcast reflects our ability to unlock opportunities across all of our businesses to the benefit of our subscribers.”