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Starz Warns Subscribers of Looming Drop by Comcast

Comcast subscribers will have to do without Starz shows like “Power” and “Outlander,” the result of the latest showdown between a major programmer and one of the big cable distributors that gets its content into consumers’ living rooms.

The Lionsgate-backed premium cable service told subscribers to Comcast’s Xfinity service Wednesdays that they can expect to lose Starz, Encore and 15 other networks the company offers starting December 10.

“Starz has been working diligently to reach a fair market distribution agreement with Comcast Xfinity in order to continue providing our shared customers with access to our acclaimed line-up of premium television content,” the company said in a statement. “However, months before our contract deadline and in spite of our best efforts to engage in meaningful discussions, Comcast has publicly stated their intention to drop our networks from all packages and bundles, ignoring industry precedent and demonstrating a total disregard for its customers, communities, suppliers and other stakeholders.”

The carriage contretemps has been expected. Lionsgate shares slumped in August after a report from The Information stated Comcast had told Starz executives it planned to drop the service by the end of the year. Comcast and MGM’s Epix unveiled an expanded agreement Wednesday that will swap Epix for Starz in the Xfinity premium package.

“We are continuing to negotiate to reach a deal with Starz that makes sense for us and our customers before our current deal expires, but we have been unable to do so at this time,” Comcast said. The agreement between the two parties is slated to end as of December 31.

The two parties have haggled over new carriage terms for months, according to a person familiar with the matter. But Comcast executives feel current terms of distributing Starz are onerous. “Starz has chosen to change its business model in response to these trends by making its content available a-la-carte on Amazon Prime and Roku and selling its service direct to the consumer through the Starz app.  All we are asking for is the same treatment for our customers.”

Consumers and U.S. regulators and lawmakers take a dim view of programming blackouts, but that hasn’t kept them from taking part with increasing frequency. According to the American Television Alliance, an advocacy group representing cable and satellite distributors, the industry has seen more than 220 such programming stoppages this year alone. Compare that figure to the number that took place in 2010 – a mere eight. Over the course of nearly a decade, that’s a rise of 2,562.5%. Dish has been in a prolonged battle with AT&T over carriage of HBO, and hasn’t offered the regional sports networks that were once a part of 21st Century Fox in several weeks.

At issue is consumers’ growing use of new methods of gaining access to their favorite programs. More viewers have chosen to bypass traditional satellite and cable services for subscription-based alternatives like Hulu or Netflix. But revenue from carriage deals is more of a sure thing than the other main pillar of media-industry support – advertising. Carriage deals are often locked in for three years or more, while the flow of advertising dollars to TV companies can be affected by the economy or the business plights of individual sponsors.

In recent months, the industry has seen showdowns between CBS and AT&T; Meredith and Dish; Nexstar and AT&T; and many others.

 

 

 

 

 

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