MUMBAI: Walt Disney Co. is in talks with Liberty Media Corp‘s Starz that may limit the movie channel‘s ability to provide films online to Netflix.
Disney wants viewers watching Starz movies online through companies such as Netflix to pay more for what the studio considers a premium channel.
Starz seeks access to Disney films for as many as five years on its cable channel, as well as continued digital rights.
The digital rights are part of the contract talks that may also determine how much Starz pays Disney and whether films from director Steven Spielberg‘s DreamWorks Studios will be included.
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.
"Netflix may be challenged to retain some of its most appealing content when Starz renews its Disney distribution deal, which expires in 2012," Barton Crockett, an analyst with Lazard Capital Markets in New York, wrote in a note.
The analyst lowered his rating on Netflix to "sell" from "hold," saying he questioned whether the Los Gatos, California-based company can meet expectations for "continued torrid growth."
