• by David Goetzl  @dgoetzl, September 2, 2011

A failure to renew a deal with Starz allowing online streaming of Disney and Sony films led to Netflix shares dropping Friday, but could be encouraging for other content providers. Credit Suisse analyst John Blackledge estimated that could be $300 million a year.

Netflix recently commissioned an original series starring Kevin Spacey and picked up streaming rights to the first four seasons of AMC's "Mad Men."

Starz said it would end talks with Netflix on Thursday in advance of its deal with Netflix lapsing in February. Blackledge wrote in a report that it was "widely assumed" Netflix and Starz would renew, with a multi-year deal at about $300 annually. Netflix shares were down 9% in midday trading Friday.

Netflix had been paying Starz $30 million a year, according to Blackledge, so Netflix's willigness to potentially pay $270 million more a year is a sure sign of how crucial the Starz content is to the company.

Blackledge estimated that Starz content, which goes beyond Disney and Sony, accounts for about 8% of total Netflix viewing hours.

Still, Blackledge said Credit Suisse maintains a $310 price target for Netflix -- which was trading at around $212 Friday, but has a 52-week high of more than $304 a share.