Starz-Comcast contract dispute attracts Division of Justice inquiry
David A. Grogan | CNBC
Lions Gate, in addition to members of Congress, known as upon the Justice Division to look into whether or not TV suppliers resembling Comcast may very well be abusing their market place in negotiations over content material licenses, stated the individuals who requested to not be named as a result of the inquiry is confidential. The DOJ was aware of the requests and has been asking for data from the 2 events, the folks stated.
The New York Submit was first to report on the casual inquiry, including that no subpoenas or requests for discovery have been issued.
Comcast, the proprietor of CNBC dad or mum NBCUniversal, accounts for about one-third of Starz’s 24.four million home subscribers. On. Oct. 16, Lions Gate warned Comcast Xfinity clients that they could lose entry to Starz amid the contract dispute.
If the 2 firms do not strike a brand new deal earlier than the contract expires, Comcast has stated it is going to substitute Starz channels with Epix channels in its Xfinity TV bundle, beginning Dec. 10. That might drive Comcast clients who need to watch Starz widespread originals “Outlander” and “Energy” to both pay for the $9 a month Starz app or $12 so as to add the Starz channel to their package deal.
Lions Gate shares have plunged 49% this 12 months, together with dipping greater than 9% because the firm notified Comcast clients of the potential cutoff final month.
The burgeoning battle is the most recent signal of the broader rigidity that is changing into commonplace within the streaming wars. Comcast is underneath strain from cord-cutters and going through rising competitors from a la carte streaming apps operating on platforms from Amazon, Apple, Roku and Google. Starz, in the meantime, is struggling to keep up its financial energy as carriers, flush with content material choices, rethink the quantity they’re prepared to pay. One other issue that might come into play is that Comcast is planning to launch an ad-supported streaming service subsequent 12 months known as Peacock.
The Comcast-Starz dispute is not the one one the business faces. HBO has been blacked out since final 12 months on Dish.
A lot of lawmakers at the moment are weighing in on the matter. In September, Sen. Susan Collins, R-ME, wrote to Assistant Lawyer Basic Makan Delrahim about her concern that her constituents could lose entry to Starz programming.
“These modifications may reduce competitors within the video programming market and restrict selections for a lot of 1000’s of shoppers in Maine and thousands and thousands extra throughout the nation,” Collins wrote. The letter notes that the DOJ’s antitrust division sought to dam Comcast’s 2011 acquisition of NBCUniversal, and asks the division to “consider the present state of affairs.”
Sen. Dianne Feinstein, D-CA, additionally despatched a letter to the DOJ asking that it look into the battle between Starz and Comcast, in line with an individual near the senator. Feinstein will not be taking sides however simply on the lookout for a decision for her constituents, the individual stated.
CNBC has obtained the letter that Feinstein despatched to the CEOs of the 2 firms. “I encourage each of you to hunt a win-win answer and take into account all choices to maintain STARZ programming on the air,” Feinstein wrote.
‘Good religion negotiations’
“We encourage either side to interact in good religion negotiations and are available to a mutually agreeable decision,” the representatives wrote.
A DOJ spokesperson declined to remark.
Comcast stated in an announcement that it is working to barter a deal “that is sensible for us and our clients.” It is also telling clients that they will not lose entry to Starz as a result of it is accessible by means of so many providers, together with on Amazon and Comcast’s X1 on-demand platform. “Starz makes its content material accessible a-la-carte on Amazon Prime and Roku and direct to shoppers by means of the Starz app. All we’re asking for is similar remedy,” Comcast stated.
The corporate added, “On the finish of the day, it is a routine business negotiation that raises no conceivable antitrust issues.”
Starz disagrees and says that Comcast is harming its clients.
“By unilaterally taking Starz out of its packages with no refund and charging its subscribers extra to obtain the service, Comcast is unfairly depriving them of relatable programming that displays their cultural expertise,” Starz stated.
Correction: A earlier model of this story had an incorrect subscriber quantity for Starz.
WATCH: Lions Gate takes on Altice