NEW YORK (Reuters) - Liberty Media Corp’s Liberty Starz pay-TV business said on Friday it planned to more than double its raft of original programing next year and seek international opportunities as it sets out its stall to take on rivals like Time Warner Inc’s HBO.
Starz Chief Executive Officer Chris Albrecht, who formerly headed HBO, said at a Liberty Media shareholders presentation that the company expected to increase the amount of original programing to between 50 and 60 hours a year from around 25 hours now.
The company, which is controlled by media mogul John Malone, plans to build on its early success with shows like “Spartacus” and “Pillars of the Earth.”
“This will likely persuade their distributors, i.e. cable and satellite operators, to more aggressively promote Starz,” whose market penetration is less than that of HBO or Showtime, said Collins Stewart analyst Thomas Eagan.
Albrecht said the company would also be aiming to create programing that can travel internationally as well as to reduce risk with creative financial partnerships.
Many investors are keeping an eye on the renewal of Starz’s distribution partnership with Netflix Inc. Following Netflix’s 5-year deal with the Epix pay-TV channel for nearly $1 billion Wall Street expects that Starz will be able to negotiate an even richer deal since it has more exclusive content. Some analysts have estimated up to $1.4 billion for a similar 5-year contract.
Starz has pay-TV rights for Walt Disney Co and Sony Corp’s Sony Pictures movies. Epix features content from its owners Viacom Inc’s Paramount Pictures, Lions Gate and MGM.
“With the expected higher revenue from a Netflix renewal, the company’s EBITDA and free cash flow should continue to grow at healthy levels,” said Eagan, referring to earnings before interest, taxes, depreciation and amortization.
Albrecht said while there was potential opportunity to do a similar Netflix deal it was not necessary for the future of Starz.
“It would be wise for us to look carefully at the decisions we’re making and its impact for the long-term.”
There have been concerns that streaming services like Netflix’s could harm the cable business.
“There’s no question the over-the-top system of distribution could potentially be a windfall or very damaging to the whole entertainment industry,” said Malone.
Reporting by Yinka Adegoke; Editing by Lisa Von Ahn and Richard Chang