Report: Starz and Showtime Can Tighten Screws, But Netflix Will Be Fine

Study by IHS Screen Digest News Flash says Netflix has enough subscribers and content deals to endure tighter windows

Last Updated: July 13, 2011 @ 9:48 AM

From "The Tudors" to "Camelot," Starz and Showtime are increasing their control of how viewers access programming online. 

Despite their attempts to lock up more of their content, streaming giant Netflix will be just fine, according to a report released Tuesday by media research firm IHS Screen Digest News Flash. 

"Empowered by its impressive subscriber growth over the past year and the strength of its brand and multi-screen presence, Netflix is increasingly comfortable with a more aggressive posture in dealing with network owners," the report reads. 

Through its pacts with channels such as Epix and the various film studios, the report maintains Netflix has more than enough content to weather any standoff with the channels. 

The report says that Starz and Showtime's moves to tighten release windows and impose limitations on when Netflix users can access their shows via the subscription service's website is a contract maneuver. It is not, as some have reported, a "life-and-death battle." 

"Rather than casting the current differences between Netflix and the two premium networks as a death match, IHS Screen Digest views the back-and-forth as an old fashioned carriage fight, not unlike the common disputes between networks and subscription-TV operators over affiliate fees," the report reads.

Showtime announced last month that it will remove some of its  programming from Netflix’s streaming library starting this fall, and Starz has imposed 90-day delays for new episodes of its shows.  

Despite the fears that Netflix's expansion is cannibalizing the cable industry and leading to cord cutting, the report argues that such anxiety is unfounded.

"First, there is no indication that greater engagement with Netflix degrades the traditional TV subscription business for premium networks," the report reads. "In fact, Netflix serves not only as an additional revenue stream but also as a powerful promotional tool for those networks that choose to engage and use the relationship to their advantage."

It does, however, go on to note that Netflix’s subscription growth far outpaces that of the two premium cable channels. Netflix’s subscribers rose by 30.6 percent in 2009 and 59 percent  in 2010, compared to single-digit growth or decline for premium channels.