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Starz commits $20m for OTT service

The US cablenet behind hit drama series Boss and Black Sails is joining the race to launch an on demand, OTT offering for viewers in the US and internationally.

Starz CEO Chris Albrecht told investors on a conference call to discuss the company’s third quarter results that it was committing US$20m to explore online launches in selected territories.

The firm has already partnered with Peter Ekelund’s Parsifal Entertainment in Sweden, which helped launch HBO’s streaming service in the region, to plan the roll out of Starz Play services abroad, with Albrecht confirming that the service would launch internationally in 2015 and carry movies and Starz original series.

He said: “We’re not naming territories now as we want to preserve the ability to compete effectively and not give out too much information too early.

“US$20m doesn’t represent the entire enterprise, it’s a capital investment. We’re looking at places to be opportunistic in growing the business. A lot of people outside the US don’t want a Netflix-only world and US companies like Starz are desirable partners.”

In the US, Albrecht said that while there was still significant value in the premium pay TV business it was inhibited, adding that it was important for Starz to find ways to reach more customers.

At the end of the third quarter Starz had a record high 22.5 million subscriptions, up from 22 million at the end of June. Subscriptions for the firm’s Encore service topped 33.7 million.

“The distribution of premium channels on broadband is an obvious opportunity. Tens of millions of broadband homes don’t have premium channels. It’s a no brainer,” he said.

The move mirrors that of HBO which announced it will be launching a stand-alone, OTT VoD platform earlier this month.

Albrecht said he assumed HBO would be talking to the same distributors as Starz.

The CEO also added that the company hadn’t looked at buying into BBC America, the US cablenet that AMC paid US$200m for a 49.9% stake in last week.

“We didn’t look at BBC America – we’re not in the advertiser supported channels business,” Albrecht said. “Though that’s not to say we couldn’t be in the future.”

He said buying up channels with an existing, mature model and business plan didn’t offer the same opportunity to innovate as exploring digital launches.

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