Well Well Well- Clause Kicks In: Netflix users see Starz over disappearance of Sony movies - #infdist

Excerpt:

"...Customers upset that their Netflix Instant queue unexpectedly lost some of its highest-profile titles, like “The Social Network,” “Salt” and “Grown Ups,” might be frustrated with Netflix and Sony. In reality, the catalyst is a pay cable network whose fate is tied to Netflix: Starz.

As part of its agreements to carry films from Sony and Walt Disney Studios on television, Starz, which is owned by Liberty Media Corp., also acquired the online rights to their movies. In 2008, Starz struck a four-year deal to distribute that content to Netflix that analysts estimate is worth $20 million to $30 million annually. According to IHS Screen Digest, the arrangement covers more than 1,000 movies a year.

The disappearance of Sony’s movies resulted from a clause in the Starz agreement. According to people familiar with the matter who spoke on condition of anonymity because contract terms are confidential, it includes an undisclosed cap, which has recently been exceeded, on the number of people who can watch Sony movies online.

To return Sony’s movies to Netflix, Starz needs to renegotiate the terms with the studio and is likely to seek higher payments from Netflix...."

via latimes.com