Disney Holds Pixar Films Ransom For Higher Fees

Starz is currently working with Disney to renew its distribution deal, and if all goes as Disney plans, Netfix could get hurt.

According to Bloomberg, Liberty Media Corp.’s Starz is renegotiating both cable and digital access to Disney’s movies starting in 2012.

In addition to running Walt Disney Co. films on its series of cable movie channels, Starz currently resales the rights of these movies to Netflix.

Disney argues that Netflix viewers should pay more for “what the studio considers a premium channel.” This could jeopardize whether you can rent Pixar films or DreamWorks’ The Lovely Bones or Paranormal Activity on Netflix.

From Bloomberg:

The digital rights are part of contract talks that may also determine how much Starz pays Disney and whether films from director Steven Spielberg’s DreamWorks Studios will be included, one of the people said. Netflix depends on Starz for access to movies including “Wall-E” from Disney’s Pixar, and without it the video-rental service would have to reach an agreement directly with the studio, the world’s biggest media company.

Studios such as Disney and Warner Bros. have been bargaining with companies like Netflix in attempt to keep their own DVD sales up. But, as Starz indicated, ignoring this growing niche would be fatal.

Netflix Co. currently has over 12 million subscribers. In addition to their mailing service, Netflix streams videos to computers and Playstation 3, Xbox, and now, Wii game consoles.

Source

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