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Starz to offer online videos via Verizon

May 28, 2008|Dawn C. Chmielewski | Times Staff Writer

Starz Entertainment, among the first premium movie channels to embrace Internet distribution, will now offer its online service in the same way it offers its films -- through cable, satellite and telecommunications companies.

Liberty Media Corp.'s Starz group said Tuesday that Verizon Communications Inc. would offer the Starz Play online video subscription service to its 8.5 million high-speed Internet customers. The service is similar to Vongo, the stand-alone movie service that Starz launched in 2006, only $4 cheaper.

Verizon will charge $5.99 a month for on-demand access to a catalog of more than 1,000 movies, including "Spider-Man 3" and "Pirates of the Caribbean: At World's End," as well as 2,500 videos of extreme sports, anime and concerts. Subscribers can download and view an unlimited number of videos on their computers or watch a live stream of the East Coast feed of the Starz television channel.

The Vongo service has struggled to gain traction, drawing a mere 315,000 monthly visitors in April, according to measurement firm ComScore Media Metrix. By comparison, 7.7 million people came to Blockbuster Inc.'s website, which offers movie DVD rentals and purchases by mail.

"When we put Vongo out there, I don't think our affiliate partners were quite ready for the product," Starz President Bill Myers said, referring to the cable TV, satellite and telecommunications companies that distribute its 16 movie channels.

The service created tensions with those partners, which interpreted Vongo not as an experiment in catering to technology's early adopters but as a competitive threat.

"Cable and satellite providers were like, 'I thought we had the exclusive to this, now you're offering it without us,' " said Deana Myers, a senior analyst with SNL Kagan. "It was a rough road for them to take."

Starz corporate parent Liberty even filed suit against Walt Disney Co. in March 2007 in an attempt to prevent the studio from selling films through Apple Inc.'s rival iTunes service when they were showing on Starz cable channels or on Vongo. A Starz spokesman said the case was pending.

The deal with Verizon puts Starz in a more traditional role, said Bruce Leichtman, president and principal analyst of Leichtman Research Group.

Starz pulls in more money from the movies it licenses, and Verizon gets an online movie service to better compete with other broadband providers.

"It's a no-lose deal," Leichtman said.

The new Starz offering also fits with the telecommunications giant's growing ambition to enter home entertainment, through a service called FiOS TV that competes with cable and satellite services.

"It's a major thrust of extending our brand," said Bill Binford, Verizon's director of programming.

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dawn.chmielewski@latimes.com

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