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Hollywood Still Hoping To Make Netflix Less Appealing
Studio Execs Want It To Be A Dumping Ground For Low-End Content
by Karl Bode 04:43PM Tuesday Mar 08 2011
With Hulu essentially a timid extension of the cable industry, Netflix is about as disruptive as you're currently going to get in the Internet video space. That's certainly not thanks to Hollywood, which has employed obnoxious licensing restrictions like 30 day new release delays to limit Netflix's power and supposedly protect DVD sales revenue. CNET notes that Hollywood execs continue to be "spooked" by Netflix, and are worried about a number of things, including Netflix's impact on in-flight movie purchases and DVD sales, which the studios insist have slowed in the age of digital media despite their new release delay windows (duh). Hollywood's plan appears to be to simply dump less valuable content to Netflix and home consumers "get bored":
The prevailing feeling among the studio managers I spoke with is that Netflix's streaming service will be a good outlet for the least-valuable material. If they have their way, Netflix will be the Internet equivalent of a swap meet, where only the most dated and least popular titles are available. The studios are betting that eventually people will get bored with the service. All this hand wringing about Netflix can be traced to the company's recent success. Netflix streaming has become too big too fast. The video-rental service, founded in 1997, surpassed the 20 million-subscriber mark in the quarter ended December 31. That represents a 66 percent jump in subscribers from the 12 million the company possessed a year before.
Incessant whining and trying to disrupt a new delivery route for your content you weren't innovative enough to create ourself certainly sounds like Hollywood thinking. However, Hollywood isn't Netflix's only problem -- with Netflix getting more vocal about the anti-competitive impact of metered billing, North America's largest ISPs are also going to increasingly be taking aim at the company.

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