Liberty Abandons Internet Movie Service Vongo

Michael Learmonth | May 27, 2008 4:14 PM

ratatouille-itunes.jpgLiberty Media's (LBTYA) Starz Entertainment is putting its Internet movie service, Vongo, out to pasture. That's what the NY Times' Saul Hansel correctly deduced after Starz announced today it had cut a deal with Verizon for a new, cheaper broadband movie service, Starz Play.

Starz will continue to offer Vongo, for now, but won't promote it. Instead it will push its Starz Play service through cable and satellite TV operators in hopes they will bundle the service with the Starz movie channel. Verizon agreed to carry Starz Play on its FiOS TV service and over broadband where it doesn't yet offer TV, for $5.99 a month.

Starz spokesman Tom Southwick explained Liberty doesn't want to spend the money to market Vongo as a standalone service, and would rather distribute through companies already carrying the Starz movie channel. What he didn't say: Vongo just wasn't that competitive with other movie services with a wide catalog of films, like Apple's (AAPL) iTunes and Netflix (NFLX).

Founded in 2006, Vongo offered an all-you-can eat movie download service for $9.99 a month, but it some major strikes against it: first, you had to watch movies on your computer, and second, its catalog of new films was limited to the studios with which Starz had deals (Disney and Sony), making the service more limited than Apple or Netflix.

What do you get for $5.99 a month? Access to Starz films but not pay-per-view titles on the Vongo service, as well as a live streamed version of the Starz movie channel.

Earlier: Starz Studio Deals Help Vongo, A Little

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