After declaring unbundled distribution a "tide that has to turn" last October, Starz CEO Chris Albrecht told investors today he hasn't decided when the company will actually launch a direct-to-consumer product in the U.S.
"We are evaluating what others are doing," he said. "It's early days. We have yet to see any hard reported data on the benefits of that to brands." Albrecht added that the network is focusing on its TV Everywhere product, Starz Play.
In October, Albrecht also said, "There is significant value in paid premium channels that is being constrained by current MVPD bundling." Some industry watchers assumed he meant that Starz was close to launching a direct-to-consumer streaming service, just as its bigger rivals, HBO and Showtime, were doing. Starz already operates a la carte streaming platforms abroad.
However, a Starz representative told FierceCable that the programmer has never had any discussions about going direct-to-consumer.
While pay-TV operators including Verizon (NYSE: VZ) and Cablevision (NYSE: CVC) have embraced HBO Now, some pay-TV companies have not -- notably Comcast (NASDAQ: CMCSA), which has said direct-to-consumer platforms like HBO Now threaten to cannibalize the pay-TV ecosystem.
For Starz, a reticence to launch a direct-to-consumer service could come down to leverage with key operators and a reluctance to lose precious distribution in the traditional pay-TV market. Starz ended June with 23.5 million subscribers, down slightly from the 23.7 million it reported at the end of the first quarter. That compares to 122 million subscribers globally for HBO.
"I can tell you that a lot of people are interested in distributing Starz," Albrecht insisted. "We have the full capability of following in the footsteps of what other premium brands are doing. We are evaluating all of these things on the basis of which ones we think provide the best net benefit to Starz."
For the second quarter, Starz reported earnings of $63 million, down 9 percent from the second quarter of 2014. Starz executives blamed the downturn on a poor quarter-to-quarter comparison. In second-quarter 2014, the programmer benefitted from $10.7 million one-time payment from Revolution Studios, in which Starz held a 15 percent ownership stake.
For more:
- visit this Starz investor relations page
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UPDATE: This story was updated on July 29 to include a statement from Starz.