Starz Nears 1 Million OTT Subs

Starz is nearing 1 million OTT subs, a milestone achieved roughly six months after the premium programmer introduced a new app that supports a new direct-to-consumer subscription offering as well as TV Everywhere, Starz CEO Chris Albrecht revealed last Thursday (Oct. 27) on the company’s Q3 earnings call.

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Update: The story originally reported that Starz had surpassed 1 million OTT subscribers, but has been changed to note that the premium programmer is approaching that milestone. 

Albrecht said Starz is also seeing OTT gains from a digital distribution deal with Amazon that was announced in December 2015 through the e-tailing giant’s new Streaming Partners Program

“Our success in this area is buttressing our core Starz Network business, which continues to perform very well,” Albrecht said. “Our digital distribution initiatives are performing well, complementing the way we work with traditional distributors and providing consumers with additional ways to access our highly rated content.”

Later in the call, Albrecht said he was contractually prohibited from saying how much of Starz’s OTT subscription mix was coming way of Amazon or its own efforts with the new app.  

However, Amazon has “been marketing it very well,” Albrecht said, adding that Starz has taken a “less aggressive approach in the marketing” of its own app by comparison.

He also said that there’s a “fair amount” of broadband-only and mobile customers who are adding Starz via the Amazon option.

“The response has been quite good,” Albrecht said, noting that, historically, “new distributors [like Amazon] have always paid a higher rate than the incumbent.”

The Starz CEO also said the programmer’s new multiyear affiliation deal with AT&T-DirecTV will include participation in the new DirecTV Now OTT service.

Elsewhere on the digital front, Starz is also offering originals such as Ash vs Evil Dead, Black Sails and The Girlfriend Experience via Vimeo’s recently launched global television store/EST offering.

Starz, which is in the process of merging with Lionsgate, added 1.2 million subs year-on-year, ending the quarter with 56 million combined Starz and Starz Encore subs.

Starz Networks posted Q3 revenues of $348.6 million, up 6% year-on-year, with operating income of $80.4 million. Consolidated revenues were $407.8 million, with operating income of $74 million.

Albrecht said it is too early to understand the full impact of the proposed AT&T-Time Warner Inc. merger.

“It's at the beginning of the process. It's going to be a long process and it's anyone's guess what happens,” Albrecht said. “We're excited about it from the point of view that we think it highlights the value of content and companies that create their own content and have the platforms to distribute their own content, and Starz is right there.”

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He also pointed out that Starz, which is merging with Lionsgate, will “still be an independent company capable of partnering and making unique kind of deals to grow our company, to monetize that content.”