Speaking at this week's Bank of America Merrill Lynch Media Conference, Liberty Media CEO Greg Maffei suggested that Starz -- the premium cable channel that the company plans to spin off later this year -- may be better off with someone else.
Maffei argues that Starz and its 20.7 million subscribers could be a better fit for a media company that operates other premium cable channels. It seems to be a thinly veiled dinner invitation for Time Warner's
For all we know, Liberty Media may even be setting a place at the table for Netflix
Netflix had a lucrative streaming deal in place with Starz, providing its streaming service with recent releases from three major studios. That deal ended in February, and Starz decided to embarrass Netflix by breaking things off last summer when Netflix shares were getting slammed.
It seems highly unlikely that Netflix would bid on Starz. It represents the old school of stodgy premium movie channels that charge too much on top of already prohibitive cable and satellite television bills. However, now that HBO is rolling out its channel as a stand-alone service in Scandinavia, the line is starting to blur between a premium cable channel and Netflix's digital smorgasbord.
Liberty Media argues that there are synergies to be realized with a Starz rival, and that's definitely true. However, if the cord cutting trend continues -- and the number of homes with cable or satellite television has been inching lower lately -- consolidation among the premium movie channels may be just a matter of survival.
The plan is already in place for the Liberty Media spinoff at a time when the company itself in moving in different directions. It bumped its effective stake in Sirius XM to 49.7% earlier this week, and it's only a matter of time before the satellite radio provider becomes the company's next spinoff candidate.
For now, Liberty Media is no different than a street peddler in Beverly Hills. It's just hoping to sell a map to Starz' home.
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