4 ms·
Here's my take: There is no threat to the studios. 1 - Netflix thinks streaming is the future. 2 - dvds are covered by first sale; streams are not 3 - ergo,
by earl 16y ago
Here's my take: There is no threat to the studios.
1 - Netflix thinks streaming is the future.
2 - dvds are covered by first sale; streams are not
3 - ergo, netflix needs a license to stream, which they didn't need for dvds
4 - they got this by a clever backdoor agreement with Starz for a paltry $25MM. This agreement ends soon.
5 - the studios are now aware of this and want a lot more money, maybe so much to make it uneconomical for netflix
6 - this is a huge and growing piece of netflix' income, yet still a small piece of the studios'. Therefore, the studios most likely have all the cards in a negotiation.
7 - the closest comps are "hundreds of millions" that cable companies pay the studios, so expect the studios to expect that type of money from netflix
8 - to the extend that cable companies are worried netflix streaming cannibalizes their offerings, they are of course communicating this to the studios
9 - the studios are well aware which parties pay them hundreds of millions of dollars a year, and which parties don't
10 - I hope netflix pulls this out.
- loewenskind 16y agoWhy doesn't Netflix or someone make their own studio? The main thing holding media back at this point is the existing studios and distributors wanting a ridiculously high cut of everything. Personally, rather than trying to find a way to play nice with those guys, I'd rather cut them out entirely.
- projectileboy 16y agoExactly my thought when I read this. Starting a movie studio wouldn't necessarily be any more difficult than it was to build a nationwide distribution network. Seems to me Netflix could start financing the shows on cable and network TV, and then partner with Google and others to build out urban wi-fi networks, city by city to go after the cable providers. Netflix wouldn't even have to win this fight, but applying pressure across the entire value chain of content creation through content delivery would keep any one entity from putting Netflix in headlock.
- ZachPruckowski 16y agoBecause studios are very capital-intensive. You've got to front hundreds of millions of dollars for a year or two before the movie hits theaters. Not to mention that it's like VC - you've got to invest in 5 movies because 2 of them will flop, 2 will be modest successes, and 1 of them will hit it big and nobody knows which ahead of time. So you're talking about getting your hands on like a billion dollars in startup cash for a studio.
- OpieCunningham 16y ago1, because it's expensive (take a look at MGM situation over the past decade) 2, having access to 1 studio, especially a no-name studio is extremely non-valuable to Netflix. When is the last time you saw a movie because it was released by Sony Pictures, or Lionsgate, vs. seeing it because the content itself was interesting to you? I'd hazard you've never done any such thing, because effectively zero people consume content based upon who owner is vs. what the content is/who the creator is. Netflix needs at least 2 of the major studios providing them content, preferably 3 or 4 of the 5 majors, in order to provide access to a wide range of material.