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Netflix Cuts Off Their Foot To Please Hollywood
And Hollywood once again decides that annoying customers is good business
by Karl Bode 01:41PM Thursday Jan 07 2010
Netflix has been busy trying to convince Hollywood that streaming broadband is good for their business, and not something to be afraid of. Hollywood has traditionally locked down the availability of streaming film licenses to Netflix because they fear that broadband-delivery services will erode revenues from the sale of physical media (DVDs, Blu-Ray). Of course everything is trending away from physical media and toward broadband-delivered content, but Hollywood has yet to learn that -- just like they've failed to learn that providing inexpensive, high-quality alternatives to The Pirate Bay helps reduce piracy.

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Netflix streaming is precisely one of those alternatives, yet Hollywood continues to treat the concept as a threat. Netflix had been using a legal loophole allowing them to offer more titles by piggybacking on Starz's licensing agreement with Hollywood. But that loophole was recently closed, so Netflix is in the process of trying to strike new deals that will help Netflix improve their broadband streaming catalog.

User Phil See Profile directs our attention to the fact that Netflix has struck a new deal with Warner Brothers. The good news? It should help improve the selection of older streamed titles on Netflix from the Warner Brothers catalog. The bad news? To get the deal, Netflix had to agree to delay the availability of all DVD releases for 28 days after they appear in stores. As Mike Masnick at Techdirt notes, annoying your customers is simply bad business:
It's hard to express just how bad an idea this is for Warner Bros., and how far out of touch with their customers they must be to think this makes any sense from a business standpoint. What they are saying is that they are not going to give in to customer demand and offer them what they want, but actually make it more difficult, more annoying and more confusing for them to get what they want -- and (at the same time!) screwing up basic marketing plans as well. Now, when movies are released on DVD and the large group of people who prefers renting to buying goes online to their Netflix account to do so, they won't be able to.
Of course Netflix's choice was to either pay huge sums of money, or just pay somewhat huge sums of money, as well as offer the studios something they desperately wanted. Unfortunately for Hollywood (and Netflix customers who enjoy new releases), what Hollywood desperately wanted was to annoy and confuse customers in a misguided attempt to protect DVD sales.

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Portland, ME

2 recommendations

reply to buzz_4_20

Re: Hollywood yet again shoots themselves in the foot

I refuse to buy any new movies from Hollywood as I am on a personal boycott.join me if you want to and head over to the used section where you buy your movies and Hollywood does not get a dime from it.

Once in a Lifetime
Stony Brook, NY

2 recommendations

reply to buzz_4_20
said by buzz_4_20:

How will this entice consumers to not pirate movies even more now.
Because copyright infringement makes it illegal. There's no "out" clause that says movie studios owe you a cheap movie right off the bat and if they don't its OK to infringe on their copyrights.

Get over your sense of entitlement. If you want their entertainment, then you play by the rules. If its too expensive, seek other, cheaper entertainment. Its not like they're selling air or water. You don't need brand new movies to live.

You have legal choices in a free society.