Movie Industry

by Mike Masnick


Filed Under:
content, licensing, movies, streaming, value

Companies:
netflix



Will Hollywood Kill The Golden Goose By Squeezing Netflix Dry?

from the watch-those-numbers... dept

Back in December, we did a little back-of-the-envelope calculating to show how much more expensive it is for Netflix to license movies for streaming, as compared to just buying DVDs and shipping them out. The differences are staggering. And apparently it's only getting more expensive. The Hollywood Reporter has an in-depth article highlighting the love-hate affair that Hollywood has with Netflix, including details on the sorts of prices that the various players are demanding (and often getting) from Netflix. What's not surprising is that they keep asking for more and more (and some are still complaining that Netflix doesn't pay enough). But the numbers being thrown about are simply staggering. And at the rate they're going up, it will make it increasingly difficult for Netflix to actually afford all of those deals. Once again, it seems like a situation where the content providers are overvaluing their content, and undervaluing the services that make that content more valuable. That is, they look at how Netflix is succeeding (especially as they're failing to adapt themselves online), and they start to get jealous, and assume that Netflix really should be paying them more money. Basically, they don't think Netflix deserves to profit at all, since it's really all "their content." What they ignore, of course, is that (despite multiple weak attempts) they were the ones who failed to provide a compelling streaming service themselves. Either way, if Hollywood keeps pushing those numbers up, they may discover that they end up killing the golden goose.

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  1. icon
    Hephaestus (profile), 20 Jan 2011 @ 10:02pm

    Re:

    "Capped ISPs"

    Technology is increasing how much movies can be compressed. So that point is moot.

    "paying royalties to studios"

    All they need to do is create a set of simple tiers and do the pay per view thing for new movies. With one added ability, "cue to watch when the price drops to free streaming or this price". Simply they need to create a Reverse Auction, where the consumer sets the price and not the studio.

    So you entire comment is a fail.

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