Netflix in Starz talks, says deal not essential

By @ibtimes on

Netflix Inc is in talks to renew a key deal with Liberty Media Corp's Starz movie channel, but the popular online video provider said the deal was not essential to its success.

Netflix -- which has emerged as a force in Hollywood and has seen its stock jump around ninefold over the past two years -- said it was in contact with Starz and believes it will reach a deal, but sees a bright future even without the movie channel as it continues to forge ahead with other content deals such as the one announced on Wednesday with Walt Disney Co's ABC network.

They have content. We have money, so unless we're idiots we ought to be able to find some way to make it work over the next couple years, said Reed Hastings, CEO of Netflix, referring to Starz, at the Barclays Capital Global Technology Conference. But he then added there is no one piece of content that Netflix needs to ensure its future success.

Netflix shares fell 1.3 percent to $2.49 a share to $187.32 a share on Wednesday, one day after it surprised Wall Street with the resignation of CFO Barry McCarthy.

Speaking at the Barclays Capital Global Technology Conference, McCarthy said he was looking forward to running his own business and assured investors he was leaving the company in great shape and on solid financial footing.

Hastings also expects record DVD shipments in the fourth quarter, while the company also presses forward aggressively with its streaming service.

Netflix's meteoric growth has raised concerns among some in the media, particularly at a time of weak DVD sales and mounting concerns about cord cutting, which is when consumers replace cable subscriptions with Web video.

Many in Hollywood are focused on the Starz talks, particularly after studio executives expressed disbelief about the 2008 deal with Starz to offer films from Sony Corp and Disney for $20 million to $30 million, which put Netflix's streaming service on the map for a fraction of what cable operators had paid Starz.

Hastings sees further growth with more television programing deals such as the one to add more shows from ABC to its streaming service.

Netflix now accounts for one-fifth of U.S. Web traffic in peak hours.

Hastings expects the cost of bandwidth will continue to fall and sees no threat of physical limitations in bandwidth.

(Reporting by Susan Zeidler; additional reporting by Alex Dobuzinskis; editing by Matthew Lewis and Andre Grenon)

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