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What: Shares of Netflix (Nasdaq: NFLX) fell more than 10% in early trading and should close down about the same. Starz announced yesterday that it wouldn’t re-up the company’s streaming deal when it expires next February.

So what: Starz’s statement was anything but encouraging. CEO Chris Albrecht spoke of preserving “appropriate pricing” for his company’s “valuable” content. The implication? Netflix low-balled in its negotiations with the Liberty Global (Nasdaq: LBTYA) subsidiary.

Now what: Netflix CEO Reed Hastings was more gracious in explaining his company’s decision to walk away, calling Starz a “great content partner” in comments published by Business Insider. He also pointed out the studio now accounts for just 8% of domestic traffic. This is what traders are selling into? A botched deal that spares Netflix from spending $300 million to preserve 8% of U.S. traffic? Hastings made the right call. Do you agree? Disagree? Please weigh in using the comments box below.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He didn’t own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Google+ or Twitter, where he goes by@milehighfool. You can also get his insights delivered directly to your RSS reader.

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