Disney, Starz Deal Will Likely Hurt Netflix

Bad day for Netflix, folks–early word coming out of the negotiations for the upcoming contract restructuring between Disney and Starz says bad things for Netflix, one way or the other.

See, we told you last week about the Disney and Starz deal that allowed Starz to exhibit Disney titles, but Disney really didn’t envision Starz taking the content to Netflix. So now, not surprisingly, Disney wants a bigger cut of that geetus lest they pull out the entire rug.  Dig the word:

“Netflix may be challenged to retain some of its most appealing content when Starz renews its Disney distribution deal, which expires in 2012,” says Lazard Capital Markets analyst Barton Crockett.

So either Netflix is damned if it does–and agrees to pay off Starz at a higher rate when it is forced to pay off DISNEY at a higher rate–or damned if it doesnt–and loses Disney content.

Bad day for Netflix, no matter which way they end up going.