Apparently finding Netflix's success to be a threat to its own pay-TV cable operation, Starz Entertainment said Thursday that it will yank its movies from Netflix when its current contract expires in February. Starz is one of the few sources -- and the major one -- of recent movies for Netflix's streaming service. Three years ago, when Netflix's streaming service was just beginning to attract users, it reportedly agreed to a $30-million deal. In the most recent negotiations -- with Netflix's streaming customers now totaling 25 million -- Starz, according to published reports, turned down $300 million. "This decision is a result of our strategy to protect the premium nature of our brand by preserving the appropriate pricing and packaging of our exclusive and highly valuable content," Starz, a unit of John Malone's Liberty Media, said in a statement on Thursday. Starz charges about $15 per month to cable subscribers; Netflix, $8 a month (for streaming only). In a commentary headlined "Netflix's Death Spiral Begins," analyst Karl Denninger said on the SeekingAlpha.com website "The '$8 all you can eat' video buffet just ran out of food." In early trading today (Friday), Netflix was down nearly 10 percent on the Nasdaq to $211. In mid-July, when it announced price hikes, it was trading at more than $300.

02/09/2011