Tuesday, August 12, 2008 3:07 AM
Starz Entertainment, owned by Liberty Entertainment, has closed down its anemic online movie service Vongo, according to a post on its site. Existing users can use the service until Sept 30th.
The move is not a surprise, considering it did a deal with Verizon in May, where it launched Starz Play, an exact copy of Vongo service but as a white-label for the telco. Vongo was a replacement launched two years ago for its earlier movie service JV with RealNetworks ( NSDQ: RNWK) called Starz Ticket. Vongo was one of the few sites offering consumers unlimited downloading of recent movie releases, for a $9.99 monthly fee...Verizon's ( NYSE: VZ) Starz Play is is $5.99 per month, and no PPV option (that's offered on Verizon though BB-owned Movielink).
According to Starz spokesperson, this white-labeling is the company's new strategy, and Verizon is the first customer..."We felt like the upside for us from a business standpoint was to wholesale it to affiliates...Vongo had fulfilled its mission by generating interest."Huh? Really?
Meanwhile, the joke-of-a-movie-service ClickStar, backed by Morgan Freeman, has closed down, but that happened more than a few months ago. Its offices were based in the building next to ours here in Santa Monica, and its furniture was sold off in a fire sale earlier this year....we should know: our neighbors Deca bought all the furniture from them.
Updated: From Liberty's earnings call today, some details on Starz's strategy with Play: "The core business at Starz Entertainment has always been to sell our services wholesale to affiliates, who in turn market them to the consumer often in a package which provides much more compelling consumer value. This quarter we announced our first affiliation agreement with Starz Play with Verizon Communications, which is offering the service to 8.5 million Verizon High Speed data customers..."