Netflix users may have recently noticed the absence of movies they might normally select to watch. Films owned by Sony Corp Pictures Entertainment have been removed from Netflix's website for several days because of a contract dispute between Sony and its partner, Starz Entertainment.

The dispute stems from Netflix's rapid success with online streaming. It now has nearly 23 million subscribers and has grown faster than expected in the last year and a half. Nearly two-thirds of those subscribers are streaming videos, which has changed the focus of Netflix's original "movies in the mail" concept, and it's likely prompted higher subscription sales.

Due to the evolving nature of Netflix, it is also rolling out a new pricing plan, offering separate options of streaming and DVD plans, as well as a more expensive combination package. With the surge in online streaming, some top cable executives are apparently worried people will drop their cable plans. A number of TV shows are offered with Netflix service, in addition to movies.

According to Reuters, the original contract allows Sony to request better financial terms from Starz. Netflix's streaming service apparently hit a licensing usage cap, meaning Starz will be required to reach a new agreement with Sony in order to get the movies returned to the Netflix site. Starz had reportedly asked Netflix to take the Sony movies down temporarily.

The current contract between Netflix and Starz was signed in October 2008 and expires early next year.

Netflix reportedly posted a blog entry that notes that StarzPlay movies were not available due to the dispute. It did not comment further. A Starz spokesperson noted that the parties are attempting to resolve the matter in a timely fashion.

Source: Reuters, "Sony movies still off Netflix in Starz dispute," Yinka Adegoke, 20 June 2011