Starz CEO: Amazon deal is accretive to our OTT business

Starz CEO Chris Albrecht said that Starz and the newly rebranded Starz Encore channels are doing well and that Amazon (NASDAQ: AMZN) is having a lot of success selling the recently launched Starz standalone OTT product.

Speaking today at the Gabelli Movie and Entertainment Conference, Albrecht called Amazon Video's Streaming Partners Program accretive to Starz's OTT business.

Albrecht described the wholesale deal with Amazon in terms of Amazon serving as a digital affiliate of Starz, complete with a rate card. That differs from Starz's agreements with Apple and Google that operate on a revenue share model.

"I'm not sure how many wholesale distributors we'll have on the OTT side," Albrecht said, adding that it's good to have more partners who can sell Starz's product and increase awareness. He said he anticipates Starz will announce more partners.

Albrecht was less positive about Starz's previous deal with Netflix (NASDAQ: NFLX). He said the problem with the Netflix relationship was, "for a very low price they got access to all our stuff and it devalued our wholesale and resale prices."

Albrecht said that when Starz's deal was up with Netflix, the streaming company offered Starz "a ton of money because they really wanted our movies. If they had offered us as a tier on top of their basic package, we probably would have done a deal for a lot less money."

Starz only two months ago launched its first direct-to-consumer service. The service, which runs $8.99 a month, joins direct-to-consumer offerings from HBO and Showtime.

But with Starz standalone only just beginning to gain marketplace footing, the premium channel is still staying bullish on traditional pay TV. Albrecht said premium channels' ability to retain and grow subscriber numbers will depend on how much of a "laser focus" MVPDs have on their video businesses.

"[MVPDs] should be focused on keeping every video subscriber [they] have" Albrecht said, adding that that's still the highest margin business for MVPDs.

Albrecht added that, among the 104 million U.S. TV households, only 25 million are Starz homes. He said that relatively small percentage of penetration is probably because customers are passing on Starz due to the price, but that that means Starz still has a lot of room for growth.

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