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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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

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.

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

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.

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!

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.

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.

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.

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).

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!!!

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

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?

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.

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.

I actually agree with paying more if you use more. It should be a utility. If you use more electricity, you pay more. Same should apply to internet traffic. A fair price would be 10 dollars plus 10 cents per GB of traffic. Thus if you are using 500GB of bandwidth every month, you are paying 60 bucks for it. If you use very little, you still need to pay 10 bucks for maintenance and access.

nubs said,
I actually agree with paying more if you use more. It should be a utility. If you use more electricity, you pay more. Same should apply to internet traffic. A fair price would be 10 dollars plus 10 cents per GB of traffic. Thus if you are using 500GB of bandwidth every month, you are paying 60 bucks for it. If you use very little, you still need to pay 10 bucks for maintenance and access.

Not quite, a utility like power and electric are natrual resources that have to be mined / pipped, etc. Internet, once a certain level of infrastructure is in place, it just works at the volume / capacity which is was designed for. It also uses the same amount of electricity to keep it "on".
You don't see workers mining either to be converted in a production facility to push data along wires.

nubs said,
I actually agree with paying more if you use more. It should be a utility. If you use more electricity, you pay more. Same should apply to internet traffic. A fair price would be 10 dollars plus 10 cents per GB of traffic. Thus if you are using 500GB of bandwidth every month, you are paying 60 bucks for it. If you use very little, you still need to pay 10 bucks for maintenance and access.

Your analogy is equivalent to saying you should subscribe to Cable TV, and pay extra for your specialty channels, and also be charged for every hour you have a TV on.

You realize that would drive most telecom companies out of business on a model like that? They make ENOUGH profit from their set rate to keep the infrastructure going. they make MORE profit when people go over their theoretical limits, to which there is not 'actual' cost to the provider to provide the extra usage, other than the increase in power usage to route the electrons through their server... Trust me, even 250GB of data wouldn't equate to over a $5 expense to the provider and thats being generous.

Should Internet ever be billed at its 'true cost' NO telecom company would survive. Internet is nothing more than sending a tiny signal through a cable..

You would have a hard time saturating a fibre line enough that would result in slower speeds, unlike that of which a power transformer can provide power to homes or water pipes can provide water to houses. "In Sept 2009, in their lab, Alcatel-Lucent achieved a speed of 2 Peta bits per second over 7,000KM. Thats over 100 million Giga bits per second." That was nearly 2 years ago as well.

Read more: http://wiki.answers.com/Q/What..._fiber_optics#ixzz1Fx1v6sEz

Unlike power and water, which are physical entities that require continuous upkeep and development to harness the power/clean water and deliver it - the internet is always there. Once its wired it works.
You can't 'shape' power distribution and only give 60V to some people and 120V to others who aren't using as much. You can with the internet...
You cant route 20Gal/min flow to these houses and 50Gal/min flow to these ones with water.. you could shape the internet exactly how you have to. Providers could block ports during peak times, throttle connections, or blanket cap the whole modem to what they feel for as long as they would want to. Theres also QoS available which can provide priority to companies/businesses over residential connections during peak usage.

Power and water are charged PER USAGE, you don't pay $50 a month for 3200KWh and if you go over get charged $.25 a KWh.. You are charged for exactly what you use. I know of NO data plan in existence in Canada, or likely even North America where that is possible.

etempest said,

Not quite, a utility like power and electric are natrual resources that have to be mined / pipped, etc. Internet, once a certain level of infrastructure is in place, it just works at the volume / capacity which is was designed for. It also uses the same amount of electricity to keep it "on".
You don't see workers mining either to be converted in a production facility to push data along wires.


While I don't agree with having to pay for more internets and wifis if using more, I will point out that the more you connect to any server, the more electricity gets used. Two reasons for this. Ever notice that your laptop gets warmer depending on what you do. That is energy being released, all of which is coming from the electricity outlet. Secondly, servers run hot so the more requests they process, the more you have to pay for the electricity to keep the air conditioner going. While the difference from a single machine is probably not much, amounting not to a much higher electricity bill, the difference is drastic when you upscale to the server farms.

Netflix has been more successful than ever in the past year.

Netflix in Canada is gonna start going down since the government has decided that we should pay more as we use more bandwidth.

Kreuger said,

Netflix in Canada is gonna start going down since the government has decided that we should pay more as we use more bandwidth.

It's not the government that wants UBB, it's the CRTC. Read this http://<<; spam >>/6aq64yv

Tager said,

buh... should be the tinyurl address in there
But they enforced it and made it the law. They could've said no

Unlike iTunes however, Netflix is EXTREMELY reasonable. $.99 for a song on iTunes? That's ridiculous to me, and it's the reason I rarely buy music and when I do, I buy it from Amazon.

I look at it in terms of investment... a big movie can cost say, $100 million to make, INCLUDING the soundtrack. What does an album cost? Not even a quarter of that. I get entertainment, an unlimited amount of it, for only $9.00 a month. With iTunes I can listen to 9 three minute songs, which gives me about a half hour of entertainment value.

So honestly, Netflix is better than iTunes because it's not overpriced, it's simple, easy to use, and they turn a profit without ripping people off. I'm all for that business model. Even if their rates bumped up to $15, it's still a very worthwhile investment for me. (I do the 1 at a time plan).

Hercules said,
Unlike iTunes however, Netflix is EXTREMELY reasonable. $.99 for a song on iTunes? That's ridiculous to me, and it's the reason I rarely buy music and when I do, I buy it from Amazon.

I look at it in terms of investment... a big movie can cost say, $100 million to make, INCLUDING the soundtrack. What does an album cost? Not even a quarter of that. I get entertainment, an unlimited amount of it, for only $9.00 a month. With iTunes I can listen to 9 three minute songs, which gives me about a half hour of entertainment value.

So honestly, Netflix is better than iTunes because it's not overpriced, it's simple, easy to use, and they turn a profit without ripping people off. I'm all for that business model. Even if their rates bumped up to $15, it's still a very worthwhile investment for me. (I do the 1 at a time plan).

iTunes costs, and other services, cost that much because the music industry got smart enough to work with the market and not against it like Hollywood is currently doing with Netflix.

Also, you are buying a 3 minute song that you can listen to as many times as you want, so saying $9.00 is only 30 minutes of entertainment doesn't make any sense. If you are only going to listen to a song once, use Last.FM. Nobody pays 99c for a song they know they will listen to exactly once and never again.

Surely the consumer should be the final benefactor, not the company execs of a few multinationals.
Since when did their profits come before utility, progress and general advancement of (legal) film distribution? Hollywood is beginning to look a lot like the music/banking business :c

Boy, do they have that backwards.

Sorry, cable. I have Netflix because you don't have those old shows I want to watch on VOD. Your premium channels are too expensive, your tiers are restrictive and your up-and-down "bundling" contracts are a drain on my patience.

Eventually media providers will start offering Netflix their shows FIRST.

Piracy, lowers Hollywood revenue. KILL IT (they wish)
Netflix, lowers Hollywood revenue, KILL IT

Seriously, it has never and will never be about how many legal ways can be used to obtain movies. It's about Hollywood's pockets.

Piracy was the same. All that illegal bull... they just want more money and when they get more they want even more. It's a never ending money hungry giant. Await next, Hollywood store, the only place to get movies.

I have about 400DVDs (Well more actually, box sets etc) and what are they doing? Yep sitting on the shelf, doing naff all.

Way back when I would have bought all my DVDs, my first being "Air Force One" which you had to flip over to watch the second half; I kid you not. But I've wised up and realised I didn't need to buy them as they were expensive (I usually pre ordered so would get it before you could get it in the shops at play.com). Once they were watched (usually once, unless it was something great) they would then get put on the shelf and more than likely never watched again on the DVD. By the time it came to watch one again I could usually catch it on the TV (Sky Movies if it was a recent one).

The point being; the price of the DVD is too much to begin with. I've not bothered with BD yet!

Strangely I've found myself renting from iTunes, it's not bad. Although I didn't bother with Avatar and watched it on the Sky Movies at Christmas .

Powerless said,
Way back when I would have bought all my DVDs, my first being "Air Force One" which you had to flip over to watch the second half; I kid you not.

Um, what the hell version of AFO did you have? The DVD was widescreen on one side, full screen (cropped) on the other. Or are you thinking LaserDisc?

PeterTHX said,

Um, what the hell version of AFO did you have? The DVD was widescreen on one side, full screen (cropped) on the other. Or are you thinking LaserDisc?


There definitely were some flippers out there. I remember renting "A Time To Kill" and having to flip it halfway through.

protocol7 said,

There definitely were some flippers out there. I remember renting "A Time To Kill" and having to flip it halfway through.

Yes (like the first DVD of "The Color Purple") but "Air Force One" was not one of them, at least not in the USA. I bought it the day it came out wayyyy back in February of 1998. Still have the disc, in storage (replaced by the Blu-ray). One side widescreen, one side full (fool) screen. Of course once they perfected dual-layer (the first disc being "Terminator 2") you didn't really see flippers anymore for single version feature films.

Ok Hollywood...stop with all the damn movie reboots, crappy movies, and make them more affordable and may, just maybe, more people will buy. Movies are like music these days...mostly crap.

techbeck said,
Ok Hollywood...stop with all the damn movie reboots, crappy movies, and make them more affordable and may, just maybe, more people will buy. Movies are like music these days...mostly crap.

I agree with ya there. Its nice to see a well done re-boot but my god how many times is someone gonna come along and try to make Batman better than it was before. There a fare too many great books out there that would be perfect candidates for the big screen to warrant all these remakes. Personally, I'd love to see Ender's Game on film.

techbeck said,
Ok Hollywood...stop with all the damn movie reboots, crappy movies, and make them more affordable and may, just maybe, more people will buy. Movies are like music these days...mostly crap.

I'd like to interest you in this FANTASTIC write-up on the topic. Movies these days are mostly steaming piles of sheite, and this article explains why: http://bit.ly/eztCS1

It's a good read, if you have a few minutes.

NPGMBR said,

I agree with ya there. Its nice to see a well done re-boot but my god how many times is someone gonna come along and try to make Batman better than it was before. There a fare too many great books out there that would be perfect candidates for the big screen to warrant all these remakes. Personally, I'd love to see Ender's Game on film.

Agree with everything you said, except for the Ender's Game part. I would rather they left that alone.

The Gunslinger said,

Agree with everything you said, except for the Ender's Game part. I would rather they left that alone.

Yes, let's keep Ender's Game on the shelf where it belongs.

Why don't they realize they will make more money by charging a ton of people fair, low prices over charging a few people out the ass?

Make a movie, sell it to 50 million at $10 a piece, or $30 a piece to 10 million. Your call.

the execs can go stick it where the sun don't shine. their inability to adapt is reason physical media sales are going down and down. nobody cares if it hurts probably more so prefer adding insult to injury with their mistakes because they're stuck in their primitive attitudes.

God please i hope so!!! I wish Netflix could get stuff right away (movies and TV shows and not just some, but ALL!).

I guess a guy can dream

threetonesun said,
Dear Hollywood,
I'm not going to buy DVDs no matter what you do, so just release them on Netflix.

Same here, although it really ticks me off to wait 30days for a release to hit netflix and then I may have to wait weeks to get it I'm still not going to waste my money on a DVD that I'll only watch ONCE!!! There is no purpose in having a copy to just sit around and collect dust - this applies to my now DVD copies of LOTR that were all FULL screen so now with my HDTV and Blu-Ray player it looks like crap so I'm stuck with them unless I can unload em for hardly nothing at a yard sale. The titles already on Netflix drive me nuts now since part 1 of a 3 part series will likely be the only one you can watch much like LOTR is now.

sava700 said,

Same here, although it really ticks me off to wait 30days for a release to hit netflix and then I may have to wait weeks to get it I'm still not going to waste my money on a DVD that I'll only watch ONCE!!! There is no purpose in having a copy to just sit around and collect dust - this applies to my now DVD copies of LOTR that were all FULL screen so now with my HDTV and Blu-Ray player it looks like crap so I'm stuck with them unless I can unload em for hardly nothing at a yard sale. The titles already on Netflix drive me nuts now since part 1 of a 3 part series will likely be the only one you can watch much like LOTR is now.


don't really watch streaming movies. streaming shows sometimes but the network speed doesn't support it. Wish Netflix would let me set the quality of the stream. If I'm on wired it thinks I'm faster. So it sucks to play. But wireless is just fine. lower quality stream = faster.

The 30 day wait thing is silly. The way I find out a movie is out is thru netflix so As far as I'm concerned there usually isn't a 30 day wait. When it's out on netflix it's ready to buy. And hopefully cheaper then. Although I usually just go to half dot com and buy used. Blu Rays used? for sure.

threetonesun said,
Dear Hollywood,
I'm not going to buy DVDs no matter what you do, so just release them on Netflix.

I agree. I have no reason to buy dvds.... Rent, stream or download for the most part.

It's way past time for the movie industry to wake up and realize that their old fashioned revenue generation model just doesn't work in the modern age. They need to make peace with the fact that their profit margins are going to have to take a hit if they want to survive. Yes, I know, that means less billions for executives to stuff in their pockets, oh how sad it is.

Reverend Spam said,

I agree. I have no reason to buy dvds.... Rent, stream or download for the most part.

It's way past time for the movie industry to wake up and realize that their old fashioned revenue generation model just doesn't work in the modern age. They need to make peace with the fact that their profit margins are going to have to take a hit if they want to survive. Yes, I know, that means less billions for executives to stuff in their pockets, oh how sad it is.

Couldn't agree more.

threetonesun said,
Dear Hollywood,
I'm not going to buy DVDs no matter what you do, so just release them on Netflix.

Enjoy your subpar video and audio quality.

DClark said,

Enjoy your subpar video and audio quality.

Well, I have a 720p TV and no surround sound, so I will, but considering Netflix streams in HD and in at least 5.1 on some movies, I fail to see the issue.

Caleo said,
It's unfortunate when bull**** like this makes piracy a better option.

I feels you bro. Period.

TerryGFX said,

I feels you bro. Period.

How is piracy and illegal actions a better option because execs want to complain about Netflix?

ccoltmanm said,

How is piracy and illegal actions a better option because execs want to complain about Netflix?

just because people weigh the options .. their is a tiny tiny chance that you will ever get caught and pay a fine or pay for the legal copies.. When netflix is available it changes the whole equation because movies are cheaper..

also netflix gives the small guy a chance too because there are some HORRIBLE movies coming out of hollywood these days.. and this gets them out into peoples living rooms where as people would never have picked them up for 5 dollars at the movie store..

Caleo said,
It's unfortunate when bull**** like this makes piracy a better option.

Errr how? The argument from the studios is a legitimate one that you should support. A monopoly isn't good for anybody. Netflix being the monopoly in streaming wouldn't be good for the studios or you as a consumer.

The Studios are basically asking for a more competitive landscape between streaming services and that isn't a bad thing. How they can adjust to a post-DVD life is something they can figure out on their own.

Also, since Netflix isn't DRM free I don't see what how piracy weighs in here... Unless you are arguing that you will pirate if you can't stream it on Netflix the same day as the DVD/BluRay release. If that is the case, I don't see how that makes any difference as that would just make you a simple pirate. I'm sure the majority of consumers aren't jumping to piracy to save a month or two between a streaming release and the DVD. Otherwise I'd imagine they would have seen the movie in theaters if it were that important (or pirated the theater release).

Frazell Thomas said,

Errr how? The argument from the studios is a legitimate one that you should support. A monopoly isn't good for anybody. Netflix being the monopoly in streaming wouldn't be good for the studios or you as a consumer.


One could say the same thing about Steam mabey? Doesn't Apple and Microsoft offer similar services? (Not sure if they share Netflix or just TV shows)

The issue i see is that someone offers movies/service at a good price which takes most money out of other sectors as its medium is far superior and the companies realise and try to delay putting items on the service to increase profits elsewhere.

Typical money grabbing from the big boys again... Wont be shocked if the movie guys jack up their rates anytime soon for netflix and other providers alike...