3 ms·

Why would they be forced to license to Netflix specifically? They could still only license to other platforms who offered them better conditions.

bilbo0s 7y ago
If they license to one distribution utility, and not the other, then they are in violation by trying to vertically integrate. (The legal term would be "cartel".) It's like American Sugar. It's not only when you have your own stores, it's also illegal if you only sell to certain stores. Basically, American Sugar had to sell to all stores without discrimination. Anything short of that means that you are still in the business of distribution. So in Netflix terms, it means that whatever deal that, say, Hulu or Amazon Prime gets, Netflix would get too. Or else Disney is colluding with Hulu to skirt their restriction on being a distributor. For businesses like Netflix, plans like Warren's are music to their ears. I bet creating all that content is a huge part of their costs. Now they can dump all of that, and acquire content at the same terms as all their competitors.
- icebraining 7y ago
  Right, but those equal terms can still be quite expensive, essentially forcing those platforms into a bidding match. If Amazon can afford $100M and Netflix only $80M, Disney can offer their catalog to anyone for $100M, and Netflix would be unable to afford it.
  - bilbo0s 7y ago
    But it would be brain dead for Netflix to not take the deal. If the base cost of everyone is going to be USD100M, then everyone's base cost is USD100M. The law would also require Amazon to give Netflix the same access to its networking platform that it gives its own divisions. (In fact, by my understanding of this whole "platform utility" thing, I'm pretty sure Amazon Prime would have to split from Amazon and buy access to the Amazon network services at the same market price as Netflix and everyone else.) So any way this whole thing shakes out, Netflix wins. Because whatever it costs, it costs that much for everyone, and Netflix gets the same content catalog as everyone.
    - icebraining 7y ago
      Netflix was the initial leader simply because they started earlier; now that other competitors appeared, they have a vertically integrated platform holding some extremely popular exclusive content (House of Cards, Stranger Things, Casa de Papel). And you're telling me they'd rather become an undifferentiated platform, competing only on the technical merits of their streaming tech (part of which runs on their competitor's machines!) and price? I'm no business expert, but that doesn't sound likely at all to me. There's a reason why ISPs are always trying to vertically integrate with content production. Moving bits around is a low-margin business.
      - bilbo0s 7y ago
        >(part of which runs on their competitor's machines!) and price? Only the new law ensures that none of it will be running on their competitors machines. A stricture mandated by law for Natflix. That's the brilliance of the law! (Well, for Netflix anyway.) And if you think House of Cards and Stranger Things are as valuable as franchises as Star Wars, Star Trek, and the Disney Archive, I have a bridge in Brooklyn to sell you. As far as content swaps go, you happily make that trade every time.

bilbo0s 7y ago

If they license to one distribution utility, and not the other, then they are in violation by trying to vertically integrate. (The legal term would be "cartel".) It's like American Sugar. It's not only when you have your own stores, it's also illegal if you only sell to certain stores. Basically, American Sugar had to sell to all stores without discrimination. Anything short of that means that you are still in the business of distribution. So in Netflix terms, it means that whatever deal that, say, Hulu or Amazon Prime gets, Netflix would get too. Or else Disney is colluding with Hulu to skirt their restriction on being a distributor. For businesses like Netflix, plans like Warren's are music to their ears. I bet creating all that content is a huge part of their costs. Now they can dump all of that, and acquire content at the same terms as all their competitors.

icebraining 7y ago
Right, but those equal terms can still be quite expensive, essentially forcing those platforms into a bidding match. If Amazon can afford $100M and Netflix only $80M, Disney can offer their catalog to anyone for $100M, and Netflix would be unable to afford it.
- bilbo0s 7y ago
  But it would be brain dead for Netflix to not take the deal. If the base cost of everyone is going to be USD100M, then everyone's base cost is USD100M. The law would also require Amazon to give Netflix the same access to its networking platform that it gives its own divisions. (In fact, by my understanding of this whole "platform utility" thing, I'm pretty sure Amazon Prime would have to split from Amazon and buy access to the Amazon network services at the same market price as Netflix and everyone else.) So any way this whole thing shakes out, Netflix wins. Because whatever it costs, it costs that much for everyone, and Netflix gets the same content catalog as everyone.
  - icebraining 7y ago
    Netflix was the initial leader simply because they started earlier; now that other competitors appeared, they have a vertically integrated platform holding some extremely popular exclusive content (House of Cards, Stranger Things, Casa de Papel). And you're telling me they'd rather become an undifferentiated platform, competing only on the technical merits of their streaming tech (part of which runs on their competitor's machines!) and price? I'm no business expert, but that doesn't sound likely at all to me. There's a reason why ISPs are always trying to vertically integrate with content production. Moving bits around is a low-margin business.
    - bilbo0s 7y ago
      >(part of which runs on their competitor's machines!) and price? Only the new law ensures that none of it will be running on their competitors machines. A stricture mandated by law for Natflix. That's the brilliance of the law! (Well, for Netflix anyway.) And if you think House of Cards and Stranger Things are as valuable as franchises as Star Wars, Star Trek, and the Disney Archive, I have a bridge in Brooklyn to sell you. As far as content swaps go, you happily make that trade every time.