Netflix has had to pay an arm and a leg to obtain the rights to stream movies via broadband. They've had to concede on some fairly major business points -- such as agreeing to delay new DVD release availability by thirty days
, something studios believe improves DVD sales, but more likely simply improves piracy rates. Oddly, despite the fact the studios are making plenty of money from Netflix and
getting some major and sometimes ridiculous concessions, Reuters
quotes several studio execs who are now whining that Netflix "is not the company they thought they were," while hinting they plan to make life even harder on the streaming company:
Senior executives at three of the big six television and movie studios said they were seeking ways to contain Netflix -- from delaying when Netflix can make new DVDs available to rent to raising the prices for digital programs. "The problem is that Netflix is not the company we thought it was when we started doing these deals a few years ago. It has changed," said a studio executive who requested anonymity because the studio's discussions were confidential.
Of course what studio execs are upset about is that Netflix has found ways around the studios' efforts to make life as miserable as possible -- and is getting more powerful anyway
. In addition to paying studios directly, Netflix has been able to strike end-around deals with Starz -- and another major deal this week with FilmDistrict
-- that provide Netflix customers content for less money than they would have paid the major studios. Studios are also afraid that Netflix will soon be large enough to have better negotiating power, becoming to films what Apple has become to music.
The irony being that Netflix is revolutionizing the film industry in the way studios are unable or unwilling to, given their primary focus on protectionism. As such, Reuters says studio executives are planning to charge Netflix higher rates -- and potentially expand the 28-day new release delay even further. That of course means greater inconvenience and higher rates for Netflix customers, who just saw a round of price hikes a few weeks ago