The Department of Justice has contacted Comcast & Lions Gate, the owner of Starz, in the midst of what seems to be an informal inquiry into the two companies’ contract negotiations. The root of the issues seems to be that TV providers (ie, Comcast) may be abusing their market position in negotiations concerning content licenses.
Comcast accounts for a large portion of Starz’s 24 million subscribers. However, Lions Gate supposedly told Comcast Xfinity customers that they may no longer have access to Starz amid the contract dispute. In the case that the two companies do not come to terms over a new contract, Comcast has planned to replace Starzchannels with Epix channels in its Xfinity TV bundle.
According to the article on CNBC, Lions Gate shares have plummeted 49% this year, since Comcast customers were informed of the potential cutoff last month. As pressures build on each side of the equation, Comcast faces the growing competition from a la carte streaming apps and the rise of cord-cutters. Starz, on the other hand is fighting to stay afloat as carriers begin to rethink just how much they are willing to pay amid the hundreds of other content options.