Who holds the upper hand in negotiations for digital distribution?
Netflix (Nasdaq: NFLX) is under the microscope after an analyst opined that the flick giant may have to pay as much as $300 million annually to retain its digital streaming deal with Liberty Media's (Nasdaq: LSTZA) Starz after the original four-year term expires at the beginning of next year.
Even Netflix has conceded that it will have to pay more for Starz than it is right now. The original deal was brokered four years ago, when streaming was limited to PCs and laptops. Living-room connectivity and the popularity of smartphones and tablets are making video streams more accessible and popular.
The challenge for Netflix is to make sure that it doesn't overpay for content. Letting a few prolific deals get away would actually give the company more bargaining leverage, since it's unlikely that any other dot-com darling can pay more than Netflix and the 23 million subs for Web-served content.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Sirius XM Radio (Nasdaq: SIRI) continues to tack on proprietary programming. Lance Bass is launching a weekly two-hour show covering the week's biggest pop hits and pop culture happenings. Buy, buy, buy?
- China's Techweb reports that Baidu (Nasdaq: BIDU) is working on its own mobile operating system. It's simply a rumor, but it makes sense, since that's exactly what this country's top search engine went on to do.
- The Supreme Court shot down a California ban that would limit the exposure of violent video games to minors. Take-Two Interactive (Nasdaq: TTWO) moved higher on the news, though its more straitlaced peers failed to follow suit.
- OmniVision Technologies (Nasdaq: OVTI) posed pretty for investors after an analyst upgraded the maker of image sensors for digital cameras.
Until next week, I remain,
Rick Munarriz
