Hollywood fears Netflix is the iTunes of movies

Netflix has been more successful than ever in the past year. It's available on perhaps every single medium, from Blu-Ray players to gaming consoles, like Xbox 360 and PS3, to standalone set-top boxes, like Roku or Apple TV. In fact, the company announced that in 2010 it had made $2.16 billion in revenue. And a recent study made aware that Netflix had garnered 41% market share of just physical DVD rentals with a whopping 20 million subscriber base. No doubt, Netflix is poised to be the dominating player in the video rental game, if it's not already.

That's exactly what Hollywood executives fear.

Greg Sandoval of CNET recently spoke to film executives to collect a general consensus on different ways to distribute films; the executives said that they were going to continue to distribute films over the web on a multitude of platforms, but don't expect them to do it at the expense of their business.

While Netflix is almost certainly a success, it's also had some adverse effects. For one, evidence suggests that Netflix consumers are less likely to purchase DVDs even if it takes years to get those movies on the service, consumers are okay with waiting. Furthermore, Netflix hurts sales in other areas of the business model. Internet-capable aircrafts make it less likely that passengers will purchase in-flight entertainment rather than just streaming off Netflix. And the content that's on Netflix hinders its value. Cable networks apparently don't care to buy and air a title once Netflix gets a hold of it.

Basically: don't expect popular titles to make its way to Netflix any time soon. Hollywood executives are quite wary of Netflix dominating the Internet streaming market and running with it. They don't want to wake up one day and find Netflix dictating exactly how that market will shift or call the shots on the terms. In short, sort of what happened with music industries when iTunes became wildly popular or what could have (and has to some extent) with the eBook market and Amazon. And Hollywood has already seen Netflix veering into that direction; Blockbuster filed for bankruptcy last year.

Physical DVD sales has been a huge profit-maker for the industry and they're not exactly willing to give that up. Hollywood is hoping that UltraViolet will be their saving grace. UltraViolet is a type of DRM that allows the user to playback their digital content on a wide range of devices through the Internet. It would allow consumers to purchase content, keep a library, and play it anywhere—like the DVD.

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The movie execs are too late .. if Netflix's was smart they take some of that money an
invest or buy 2 smaller studios. They could make special feature movies or TV shows
that would only be available to Netflix users.

If they don't want to go that route. Their are alot of small studios that will do special
deals with Netflix.

Netflix all the way here. If there is a new release that i need to see then I can go about 3 blocks to a Blockbuster kiosk and rent it for a buck. If it isn't there I can go 2 blocks and rent it at my local video store for 2 bucks.
Screw buying DVD's. I learned that lesson with VHS. I no longer buy movies, music or games. It's all digital for me.

People have less money, banks have more money (that's our economy), and everything costs more. Blame Netflix for DVD sales being down? Don't blame the quality of the films, or the economy, because theres no money in that. People have more choices now. Things will change (like delivery costs), and people on both sides will cry about it. So what's new?

Yeah, Hollywood really ticked me off when they started holding back new releases from Netflix, their single largest LEGAL distribution mechanism post big-screen.

Oh my god no! This service has the cheek to give people something they want while giving money to the people who make it actually allowing them to earn a living doing something they love!!! That's horrible.

Could you imagine if regular everyday people who work in offices, factories or shops had to endure only being paid what the market was willing for their services, how do these poor film and music makers possibly survive this huge injustice!!!

Subject Delta said,
I find the DRM included with services like Netflix to be far too prohibitive.

I'm, too, am curious as to what you mean by this.

Netflix's implementation of DRM has been the most transparent of all the services that I've used.

Manksgloob said,

I'm, too, am curious as to what you mean by this.

Netflix's implementation of DRM has been the most transparent of all the services that I've used.

In that I can stick a DVD in any player I want and watch it without issue.

Subject Delta said,
In that I can stick a DVD in any player I want and watch it without issue.

You can. There's nothing special about Netflix DVDs.

Subject Delta said,
Obviously I was talking about the DRM on their download service

They don't have a download service. You can stream movies though.

Once upon a time the movie studios had only ONE point of sale: the movie theaters. They fought against VCRs until they started making money from tape sales and rentals. Then came DVDs and they got to sell us the same movies (at a lower production cost than tapes) Now no one wants physical media (sorry BluRay, but it's true) and the movie studio cartel that never bothered to come up with their own distribution plan, want everyone to go back to buying physical media, just because it's more profitable for THEM!
Just like with music, the media cartels can't see beyond their immediate cash-flow, and they try to hinder anything that poses a threat to their cash cow.
Well movie studios, you've been having record year after record year at the box office, and no one wants to pay a second time for a shiny disc. Sorry for your short-sightedness, but you brought it on your greedy selves.
/endrant

gark said,
Once upon a time the movie studios had only ONE point of sale: the movie theaters. They fought against VCRs until they started making money from tape sales and rentals. Then came DVDs and they got to sell us the same movies (at a lower production cost than tapes) Now no one wants physical media (sorry BluRay, but it's true) and the movie studio cartel that never bothered to come up with their own distribution plan, want everyone to go back to buying physical media, just because it's more profitable for THEM!
Just like with music, the media cartels can't see beyond their immediate cash-flow, and they try to hinder anything that poses a threat to their cash cow.
Well movie studios, you've been having record year after record year at the box office, and no one wants to pay a second time for a shiny disc. Sorry for your short-sightedness, but you brought it on your greedy selves.
/endrant

+1

This, honestly, leads to piracy... Whether the "cartels", as you called them, like it or not.

I would be more than glad to pay for Netflix if movies came out on it as soon as the DVD went on sale... but they don't, and that's a shame. I watch plenty of movies at the theaters, and if I like those movies, I end up renting/streaming/downloading them. I already paid about $11 to watch it on a big screen, now they want me to pay $30+ to watch it on BluRay? That's $41 for a single movie.

I have a Zune, and also, a Zune Pass Subscription. I pay 14.99/month for unlimited music. Of course I don't get to keep it if I spot paying, but that's ok with me. I don't expect to be able to keep all the movies from Netflix after I stop paying either.

All I'm saying is streaming/downloadable media is the future, there's nothing the "cartels" can do about it. Either they move on and give the customers what they want, or they will go down when people (and not all, obviously) pirate the movies if they're not available on Netflix (or whatever other streaming companies there are).

Why is it that these companies here lately have been complaining about new technology and competitors more and more?

I believe it's pretty simple, you come out with a great product, then keep improving it to get customers to keep coming back (or release a different product, with advances). You don't release a product and expect it to hold the company over forever and then complain when the competition releases a better product than you.

Also, isn't it illegal in the United States to have meetings with other companies to control a product/service? I seem to remember a few companies getting in DEEP trouble over this.

This is what the world is coming to, a bunch of scumbag lawyers fighting each other instead of people doing the right thing. Gone are the days of respect, etiquette, and and unity amongst the country; now it's GREED.

I say to HELL with the movie companies! If Netflix can charge us only $8 a month for instant streaming all month long then I think one thing - that the FREE MARKET has done what it was designed to do. If someone wants to beat it (i.e. like BLOCK BUSTER) then make your service cheaper and better, it's as SIMPLE AS THAT.

This is what happens after years of customer abuse. They want me to buy their dvds and blue-rays instead? Fine, let me rip it to whatever media player I want without dealing with their BS. I'd rather wait on netflix than buy a disc that creates nothing but headaches to get onto my phone, tablet, and media player, under threat law.

Hmm too bad bandwidth caps are the more common these days. UltraViolet may as well be UltraUseless for some. I'll stick to physical media.

Personally I buy physical media, ie. blurays, for the quality audio and video that i cannot get from ANY streaming service. It's also rather difficult to download bluray ISOs, unless you want to spend 25 gig on a movie.

So in my opinion, there should be room for both types of service!

Most of the movies these days are just rehashes of popular movies from years and years ago. I've seen the originals and don't mind waiting to rent the, more than likely, poor remake.

I love these dinosaur corporations clinging desperately to their dinosaur formats and ways of business.

I love these kinds of articles. I've been a Netflix streaming subscriber for over a year now. At this point, if it's not on Netflix streaming, I'm not watching it. If the studios pulled all their movies from Netflix streaming, I'd cancel my Netflix subscription and just never watch another movie.

It's the same with Hulu and TV shows. If a network doesn't put their show on Hulu, I just don't watch it.

I don't know if I represent the majority or the minority, but I don't care. I've made my choice, the studios can do whatever the like.

in order for Netflix to be like iTunes in any way, they would have to be offering box office content, and Netflix is anything but that.

Don't get me wrong I have NF and thoroughly enjoy watching all 7 season of Buffy the Vampire Slayer =D

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