Starz, Altice USA Deadline Passes With No Carriage Deal

Outlander Still Season 3 - Publicity - H 2017
Courtesy of Starz

The U.S. cable operator is telling Optimum and Suddenlink customers to subscribe to Starz's streaming service as it will no longer carry Starz or StarzEncore programming directly.

Starz and cable operator Altice USA on Sunday failed to reach a new programming deal to keep 17 Starz, StarzEncore and MoviePlex premium channels on Altice's Optimum and Suddenlink cable TV services in the U.S. market.

In a statement obtained by The Hollywood Reporter, Altice said as of midnight, Dec. 31, that it will no longer carry Starz or StarzEncore programming directly after Starz "refused all offers, including an offer to extend our current agreement." Instead, Altice will advise Optimum and Suddenlink customers to subscribe to the Starz over-the-top streaming service for $8.99 a month.

"Given that Starz is available to all consumers directly through Starz' own over-the-top streaming service, we don't believe it makes sense to charge all of our customers for Starz programming, particularly when their viewership is declining and the majority of our customers don't watch Starz. We believe it is in the best interest of all our customers to replace Starz and StarzEncore programming with alternative entertainment channels that will provide a robust content experience at a great value," Altice said in a statement.

Starz parent Lionsgate, in its own statement just after midnight Sunday said Altice "has shown an unwillingness to negotiate in good faith to the detriment of our shared customers, and they have removed Starz from their platform." The studio on Monday in a new statement added that Altice sought "a drastic reduction in price" for Starz programming and wanted to penalize the premium cable channel for launching a direct-to-consumer offering amid competition from Netflix, Amazon Prime and other digital insurgents.

New York-based Altice countered that Starz had been looking for new carriage terms that would force Altice to charge its own cable customers more than the cost of the OTT service. Lionsgate urged Optimum and Suddenlink subscribers "to demand the refunds that they deserve" and to subscribe to the Starz video streaming service.

The failure to reach a new carriage deal follows Starz and Altice conducting tense talks over how much the cable operator will pay to continue offering Outlander, Power, American Gods and movies from the premium cable channel to its cable customers. Altice will replace the Starz channels with Hallmark Drama, Sony Movies, MGM HD, HD Net Movies, Flix and Cowboy Channel.

Ahead of the New Year's Eve deadline to resolve the carriage dispute, Starz threatened to pull its channels and programming if a new deal could not be reached. Starz recently signed new deals with major distribution platforms, including Verizon and Hulu.

Altice in the last year has faced carriage disputes with Disney and AMC that went down to the wire before new agreements were reached.

Jan. 1, 3:30 p.m. Updated with a new statement from Lionsgate on Altice's move to go dark with Starz and StarzEncore programming.