Netflix takes two hits: Starz drifts away, subscribers get outage credit

Netflix (Nasdaq: NFLX) has learned bad things apparently really do come in threes. First, long-time ally Starz said it would enforce a three-month limit on the time between when a new TV episode appears on Starz and when it's available on Netflix, and then Netflix itself said it would offer a 3 percent credit on this month's bill for customers affected by a service outage.

The Starz news follows on the heels of Showtime's announcement that it is pulling its popular Dexter and Californication programs off the streaming service. Liberty Media (Nasdaq: LCAPA)-owned Starz is probably facing its own financial challenges getting content, so it's pulling back from distributing that content too soon to Netflix.

Meanwhile, Netflix apologized for a several-hours-long service interruption in an e-mail to its subscribers that blamed the outage on "technical issues" and promised, "To make it right, Netflix is offering a 3 percent credit to customers on their next billing statement."

It's not the first time Netflix has offered subscriber credit for a streaming outage; subscribers have received a similar message at least once in the past 12 months. However, the email added some clarification this time around: the 3 percent credit applies only to the first $7.99 of a subscriber's monthly bill, equivalent to the cost of a streaming-only subscription. It's also not automatic: subscribers have only seven days--six days, at this point--to get the credit by following a link in the email message.

For more:
- the New York Times has this story
- CNET has this story

Related articles:
Netflix facing end of bargain prices for streamed content
Starz light on Netflix; say it'll hold back new series from day-after streaming

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