Netflix (Nasdaq: NFLX), which has been feasting on bargain basement programming costs that deeply undercut traditional pay TV providers, will face a wall of new higher prices to stream content when three-year contracts with its suppliers start to expire throughout the remaining months of the year.
The first of these new contracts--a form of retransmission consent without all the government rules--will happen in October when Starz Entertainment renegotiates a crucial deal that gave Netflix an unbeatable pricing edge over more traditional video suppliers.
"There is no way that Starz can renew that deal," according to a piece in The Wrap. "It has already assured its cable, satellite and telecom customers that it intends to establish pricing parity." That means, the story said, Netflix will be asked to cough up an additional $300 million to $400 million a year.
Other Netflix contracts will expire in 2012-2013 and each is expected to up the ante "by at least a half billion dollars," the story said, which would force Netflix to find five million new subscribers.
For more:
- The Wrap has this story
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