This is from the executive session on Friday, Jan. 9, 2015, of the Television Critics Assn. tour with Chris Albrecht, CEO of Starz. A reporter asked Albrecht about how Starz felt about over-the-top services, and he took the opportunity to talk about the various definitions of an OTT service. Here’s what Albrecht said (we’ve edited this and added the numbers):
I think people use [this expression] differently….There’s three ways I look at over-the-top….
1) One would be our current distributors use their infrastructure to sell Starz on top of high speed. We love that idea. We can’t wait for them to do it….[W]e think it’s a great opportunity for them and a great opportunity for us, to create smaller packages and then sell premium Starz in particular, because it’s one of their highest-margin products, on top of that. We’re in that game.
2) New distributors…virtual MVPDs [Multichannel Video Programming Distributors], or people that call themselves virtual MVPDs. Sony has done a lot of work putting together plans to do that. I would consider that over-the-top because it’s over the top of someone else’s infrastructure. There might be other players that play in that space as well. And we’re interested in talking to those people….That’s a different situation, because when we’re talking to new potential distributors we want to make sure we are packaged correctly, priced correctly. And by that I mean with respect to what our other distributors pay and mindful of our long-term relationships with our distribution partners.
3) The third one would be direct-to-consumer. Really direct….I would say we’re interested in the first two [definitions of over-the-top, above] and probably far away from [this] third. It’s an interesting proposition and one that I don’t see in Starz’s immediate future and one that, if the other two happen, [I’m] not sure [that this] third one becomes that lucrative or worth the risk. But I don’t know what other companies will do.