Starz goes dark on Altice in first big carriage battle of 2018

Altice's Experience Store
The blackout affects 17 Starz, StarzEncore and MoviePlex premium channels. (Altice USA)

Premium channel Starz went dark on Altice USA cable systems at the turn of the new year, with the two sides unable to come to a licensing renewal deal.

The blackout affects 17 Starz, StarzEncore and MoviePlex premium channels. Both of Altice’s systems—Optimum and Suddenlink—are impacted. 

In a statement, Altice suggested that its video customers turn to Starz’s over-the-top programming service, which the cable company itself markets through its portal.

"Given that Starz is available to all consumers directly through Starz's own over-the-top streaming service, we don't believe it makes sense to charge all of our customers for Starz programming, particularly when their viewership is declining and the majority of our customers don't watch Starz,” Altice said in its statement. “We believe it is in the best interest of all our customers to replace Starz and StarzEncore programming with alternative entertainment channels that will provide a robust content experience at a great value.”

A day ahead of the blackout, Starz released its own statement: “Starz has been working in good faith to reach a fair and reasonable distribution agreement with the team at Altice in order to continue providing our subscribers with all 17 Starz, StarzEncore and MoviePlex premium channels.”

“… But rather than negotiating in a meaningful way, Altice is demanding a totally unreasonable agreement unlike anything that has previously existed in our longstanding partnership,” Starz added. “We urge them to join with us in working to reach an agreement that is fair, reasonable and operates in the best interests of our customers, many of whom cannot otherwise find programming that speaks directly to them.”

According to Jefferies analyst John Janedis, Lionsgate-owned Starz would have to add more than 700 OTT subscribers to make up the nearly 1 million linear subscribers that would be lost if it doesn't come to terms with Altice. 

"This morning's news that Altice has dropped Starz was unexpected, though given Altice's recent negotiations with DIS, AMCX, and VIAB, should not necessarily come as a surprise," Janedis wrote in a note to investors this morning.