Cable service provider Altice USA (ATUS 21.23, 0.00) is little changed in pre-market after removing Starz and Encore channels from its lineup due to inability to reach a contract extension with Starz.
Altice is a relatively small service provider, but most of its nearly five million customers are located in the New York area. The company also has some operations in the Midwest.
According to Altice, the channels were removed because Starz demanded a rate increase that would have prompted Altice to increase the price of its cable service, noting that after the increase, subscribers would have been paying more than the cost of the Starz standalone streaming service.
Conversely, Starz claims that Altice requested a significant reduction in price that Starz viewed as inconsistent with the market. The company claims that Altice did not want to negotiate a forward-looking agreement in the best interest of the customers of both companies.
When providers remove channels from their offerings due to contract disputes, the resulting wave of customer complaints often prompts the negotiating parties to resume discussions. However, in this case, Altice made it clear that customers who want to keep Starz can subscribe to the channel's standalone streaming service and still pay less in total than they would have paid had Altice agreed to the higher rate demanded by Starz.
Altice will replace 17 Starz/Encore channels with Hallmark Drama, Sony Movies, MGM HD, HD Net Movies, Flix, and Cowboy Channel. Certain customers will also receive The Movie Channel.