Starz to Telcos: Rethink the Way You Package Tiers

ATLANTA--Starz Entertainment president and chief operating officer Bill Myers urged telephone companies to consider bundling his company’s movie channels at lower-priced tiers than the cable operators' packages that include the Starz lineup.

“One of the great things about the telco space is, you don’t have this history -- you don’t have those relationships with programmers,” Myers said, as part of his keynote here at the TelcoTV show.

Myers said movies are consistently the most popular programming that consumers watch on TV. But cable operators typically offer Starz’s movie channels only to customers at higher-priced tiers, in the range of $75 to $80 per month, he said.

Telcos have an opportunity to offer a package that includes movie channels for $50 to $55 per month by dropping certain other programming, according to Myers.

“We know, talking to consumers, that they’re frustrated,” he said. “They’re paying for content they don’t really want to see.”

Added Myers, “If you take that content and package it, and price it in a way that it’s a real strong price/value [ratio], you can really wreak havoc in this space,” he said. “Consumers are looking for good content at the right price.”

In an interview following his keynote, Myers noted that he was not suggesting telcos adopt a la carte pricing plans. “I don’t think a la carte works. Pricing just won’t work in that model.”

The point is that telcos “have an opportunity to not get tied into the whole ‘basic’ and ‘expanded basic’ lineup,” Myers said.

But the horse is out of the barn to some extent with Verizon Communications, whose core FiOS TV lineup includes more than 200 channels, and AT&T, which provides more than 190 in the basic U-verse TV package.

Myers, though, said Starz may have opportunities to have bundling discussions with smaller telcos that haven’t committed to channel lineups. He also said Starz is having similar discussions with cable operators to bundle the programmer’s movie channels at lower-priced tiers.