Netflix has inked an agreement with Starz Entertainment under which Netflix subscribers will gain unlimited access to 2,500 additional movies and other choices from the Starz Play broadband subscription-movie service.
This latest deal follows on the heels of two recent Netflix agreements with the CBS Television Network and Disney-ABC Television Group, which add current-season episodes of popular CBS and ABC TV shows to the company’s growing portfolio of online video content.
Distribution agreements like the Starz deal reflect “the creative ways we are working with content partners to expand the profile and the number of choices our subscribers can watch instantly over the Internet, in addition to the 100,000 titles we offer on DVD through the mail,” according to Ted Sarandos, chief content officer at Netflix.
Still in Its Infancy
Gartner projects that worldwide subscriptions to the Internet Protocol television (IPTV) services offered by Netflix and its many competitors will rise by 64.1 percent year-over-year to reach 19.6 million customers in 2008. On the downside, however, Netflix and its rivals will face an increasingly competitive video-streaming landscape going forward.
“The biggest change since 2007 is the rapid advent of new entrants making inroads in consumer video consumption and placing greater demands on IPTV operators to innovate,” said Elroy Jopling, Gartner research director. “The video consumption field will become increasingly crowded.”
Moreover, despite all the hoopla, the market is still in its infancy. According to Gartner, only 1.1 percent of households worldwide will be IPTV subscribers by the end of this year, and worldwide household penetration is expected to grow to only 2.8 percent by the end of 2012.
Yankee Group analyst Josh Martin agrees that the online video market is still taking shape. “But Netflix has a lot at stake because it already has millions of subscribers renting DVDs through the mail,” he…