Sources tell The Streaming Wars that Starz is on the verge of quietly launching its highly anticipated streaming bundle with BritBox, priced at $14.99 per month and set to go live this Thursday. With only final approval from the Starz technology team remaining, insiders indicate the soft launch is imminent. Despite the low-key rollout, Starz’s partnership marks a significant milestone as it seeks to strengthen its direct-to-consumer (DTC) offerings.
Announced during Starz’s most recent earnings call, the bundle allows subscribers to access content from both services directly via the Starz app. This gives viewers access to Starz’s hit shows like Outlander and The Serpent Queen and BritBox’s British drama lineup, including Vera, Shetland, and Downton Abbey. This move aligns with Starz’s focus on expanding its DTC offerings and leveraging its proprietary technology to enhance the user experience.
By bundling with BritBox and handling the billing infrastructure internally, Starz aims to bypass third-party distribution platforms, such as Roku, Apple, Google, Amazon, etc., which typically charge what’s known as a “platform tax”—a significant cut of subscription revenue. This move allows Starz to retain a larger share of its profits while maintaining full control over customer relationships and data. By avoiding third-party platforms, Starz strengthens its direct-to-consumer strategy and reduces reliance on external gatekeepers.
BritBox also benefits from Starz’s DTC approach by gaining access to Starz’s already established user base. This partnership opens the door for more international content to be bundled in similar DTC models as services look to maximize revenue and streamline distribution.
The Take
The launch of the Starz-BritBox bundle marks yet another step in streaming services’ ongoing effort to regain control over customer relationships in a landscape increasingly dominated by third-party distribution platforms. Streaming services like Starz are under pressure from these gatekeepers, who control access and demand a 15-30% cut of subscription revenues, taken in perpetuity through their in-app billing systems. There’s also a quiet but growing resentment among media companies about these fees, though few are addressing it publicly.
By bundling with BritBox and offering the product directly via its owned and operated platform, Starz can bypass these gatekeepers and refrain from sharing a significant portion of its revenue. This strategy follows a growing trend, most notably spearheaded by Disney, which has successfully bundled its services (Disney+, Hulu, ESPN+) while maintaining full control over the customer relationship by handling transactions through its website.
Revenue Control and Platform Tax
Starz’s decision to bundle its content with BritBox and manage subscriptions directly responds to the industry’s dissatisfaction with platform taxes. Third-party platforms like Apple and Google often take a cut of subscription revenue, which significantly reduces streaming services’ profit margins. By bringing content distribution and billing in-house, Starz can avoid these fees.
This trend parallels the recent ruling against Google in the Epic Games antitrust lawsuit, which forces Google to offer alternatives to its Play Store and limits its ability to collect exclusivity fees. Both cases highlight a growing movement where content providers, whether in gaming or streaming, are taking control of platform monopolies.
Industry Trend: Following the Direct-to-Consumer Model
The term “direct-to-consumer” (DTC) is often used loosely, but not all subscribers are indeed DTC. As we recently suggested, the video subscribers should be broken down into three distinct categories:
- Wholesale Subscribers: These customers receive streaming services bundled with other products, such as Starz through Hulu with Live TV or BritBox via Amazon Channels. While the media companies count these users, they don’t control the direct relationship.
- Third-Party Direct Subscribers: These customers sign up for Starz or BritBox through apps like Roku or Apple TV. However, since payments must be facilitated by each platform’s in-app billing system—Roku Pay and Apple Pay, respectively—rather than by Starz or BritBox directly, these do not qualify as true direct-to-consumer transactions. The third-party platform takes a cut of the revenue and controls the customer relationship.
- Pure Direct-to-Consumer Subscribers: These are the true DTC customers. They subscribe directly through the Starz or BritBox website or app, where the media company handles all payments, retains full control of the relationship, and owns the customer data.
Starz’s new bundle with BritBox falls into this final category. By handling the billing infrastructure internally, Starz ensures that these are pure direct-to-consumer transactions. This strategy allows Starz to avoid third-party platform fees, control the customer experience, and access valuable customer data.
This “pure” DTC model, popularized by companies like Disney with their Disney+, Hulu, and ESPN+ bundle, is becoming increasingly important as media companies gradually aim to take back control from third-party platforms. For services like Starz and BritBox, this approach offers a path to higher profitability and greater autonomy in a crowded streaming landscape. However, it remains a notable but slow-moving shift.
A Path Forward for Streaming Services
The Starz-BritBox bundle highlights a key example of how streaming services can gradually reclaim independence and boost profitability. While not an overnight change, this DTC approach provides streaming services with a way to escape the influence of third-party platform gatekeepers. By taking control of subscription revenue (and potentially advertising in other cases), Starz sets a precedent for other platforms to follow.
As the streaming industry evolves, expect more partnerships like the Starz-BritBox bundle and an increasing focus on building proprietary technology stacks that allow services to engage more directly with customers. This shift could lead to greater bundling of complementary content as streaming platforms explore ways to maximize value for subscribers while bypassing platform fees.
Controlling revenue and customer data will be critical for services looking to remain competitive in an increasingly crowded marketplace. By launching this DTC bundle, Starz is demonstrating a viable path forward for streaming services to thrive independently of major distribution platforms. The Streaming Wars has spoken to various media executives about this issue, which we’ll cover in greater depth soon.
