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I don't think you're giving Bewkes due credit. It seems like the point wasn't lost on him at all; the industry seems to have realized that the wave is going by,

I don't think you're giving Bewkes due credit. It seems like the point wasn't lost on him at all; the industry seems to have realized that the wave is going by, and they got caught flat-footed. See: "Time Warner’s HBO is in the process of introducing a new online service, HBO GO, which will be available to authenticated HBO subscribers. Mr. Bewkes has also led an industry initiative he has called TV Everywhere, whose idea is to offer cable network programming online for anyone who is a verified cable subscriber. " They're trying to take advantage of the economies and at least some of the capabilities of the digital distribution platform without losing a huge chunk of profits (subscribers). It makes sense to try and diminish their digital-distribution competition (including Netflix) for business reasons. Netflix jumped the gun on them by hopping on the digital platform first, and at very subsidized prices, so the conglomerates have to play catch-up. Don't forget, though, that this kitty got claws: big media can still price Netflix out of the game, or at least out of this ridiculous growth phase, since they do own/create the content that Netflix thrives on, and can raise prices.

jey 16y ago
Nah, that seems like a classic textbook late response of a company caught empty-handed by a disruption. The very pressures you cite to preserve their existing business will ultimately kill them without some IBM-style creative thinking. Yes, it's theoretically possible that the TV industry is inefficient enough that the oligopoly can keep out new entrants, but Netflix already has way too much market share for that to work out in the cartel's favor.
- earl 16y ago
  No, Netflix doesn't. If the studios don't sell netflix a streaming license, then Netflix has no streaming business. I am aware of no law that requires the studios to sell such a license; even if there is, I doubt that it requires the studios to sell such a license on more generous terms than it sells license to cable companies, who pay lots more than netflix.
  - Thuraash 16y ago
    I agree. Moreover, even if they choose to continue to do business with Netflix, any businessperson would see the potential for raising prices, and Netflix may make a big bruhaha now, but in the end, they'll pay it because they'll still make money. Netflix' ridiculous profits and growth rate represents a demand unanticipated by the content providers that serve it. The only reason they didn't capitalize on this potential and raise prices is because of the length of the contract. As soon as it lapses, expect Netflix' profit margins to get a whole lot skinnier, and their growth to slow down. This looks like a classic case of a binding contract slowing down delaying the market response to unanticipated innovation. It's not the conglomerates shutting Netflix down with extreme malice and prejudice; it's the market adjusting and redistributing the newfound pie.

jey 16y ago

Nah, that seems like a classic textbook late response of a company caught empty-handed by a disruption. The very pressures you cite to preserve their existing business will ultimately kill them without some IBM-style creative thinking. Yes, it's theoretically possible that the TV industry is inefficient enough that the oligopoly can keep out new entrants, but Netflix already has way too much market share for that to work out in the cartel's favor.

earl 16y ago
No, Netflix doesn't. If the studios don't sell netflix a streaming license, then Netflix has no streaming business. I am aware of no law that requires the studios to sell such a license; even if there is, I doubt that it requires the studios to sell such a license on more generous terms than it sells license to cable companies, who pay lots more than netflix.
- Thuraash 16y ago
  I agree. Moreover, even if they choose to continue to do business with Netflix, any businessperson would see the potential for raising prices, and Netflix may make a big bruhaha now, but in the end, they'll pay it because they'll still make money. Netflix' ridiculous profits and growth rate represents a demand unanticipated by the content providers that serve it. The only reason they didn't capitalize on this potential and raise prices is because of the length of the contract. As soon as it lapses, expect Netflix' profit margins to get a whole lot skinnier, and their growth to slow down. This looks like a classic case of a binding contract slowing down delaying the market response to unanticipated innovation. It's not the conglomerates shutting Netflix down with extreme malice and prejudice; it's the market adjusting and redistributing the newfound pie.