Starz CEO Says Cable Operators Can Benefit By Offering Premium Channels Outside The Pay TV Bundle

Add Starz CEO Chris Albrecht to the list of premium channel chiefs who are seriously thinking about using the Internet to offer his programming directly to consumers — including those who don’t buy the pay TV bundle. “It’s not about a la carte,” he told the Goldman Sachs Communacopia investor confab in NYC. “It’s about adapting the technology and our businesses to what’s happening demographically.” Some 15% of millennials don’t subscribe to pay TV, according to one outside estimate. The issue isn’t so much whether they’ll be so-called cord-nevers: Since most subscribe to broadband, the CEO says, “the question is whether they’ll be video nevers.”

starz-1-logoBut unlike the comments this week from Time Warner’s Jeff Bewkes (HBO) and CBS’ Les Moonves (Showtime), Albrecht emphasized that cable operators — the leading broadband providers — also can  benefit by offering the Starz Play online service to people who don’t buy a video package. Companies share an interest in reaching what he described as “the 50 million homes that have broadband and don’t have premium” TV. A Starz Play-broadband package for them could “create high-margin dollars for us and for distributors. … It’s a no-brainer for the current partnership to bring these products to consumers” who want them but “probably can’t afford them” if they also have to buy the expanded basic video bundles.

Albrecht added that Dish Network, Verizon, and Sony — all now developing Internet-delivered pay TV services — “will be receptive” to an arrangement to offer Starz. “We need to be able to go to these partners. … Innovation has to happen one way or another.”

Starz Play appMeanwhile, Starz and pay TV distributors “have to do a better job of getting people to download” the Starz Play mobile app. “The people who have downloaded it watch a lot more” Starz programming than those who don’t. For now, though, “it’s a big story, but it’s not a widely distributed product yet.”

On another subject, Albrecht says he was surprised in late 2012 when Disney agreed to shift its films from Starz to Netflix for premium TV airings beginning in 2016. He acknowledged that “we weren’t willing to match the money” Netflix offered. Still, “I didn’t understand why they wanted to hand the keys to the kingdom, no pun intended, to the kids business.” He added later that “people who have OD’d on [subscription VOD] money are going to be surprised when [distributors] say, ‘Eh, we don’t need that anymore.'”

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