Will Studios Lose The War with Netflix?

Time Warner CEO Jeff Bewkes has been really taking it to Netflix the past few weeks, insisting that the video distribution company doesn't have the cojones or muscle to go up against old media companies like, well, Time Warner. Terry Heaton has a blog post insisting that Bewkes is wrongheaded and that people bet against Netflix at their peril:


The lessons for local media are many, beginning with admitting, once again, that consumers are in charge. We also need to learn the lesson that Netflix is teaching us about digital video — that people want it when, how and where they want it. This speaks to one of our favorite topics: on-demand, unbundled distribution. It also speaks volumes about how people will pay for a wonderful service. It may not be as much as we’d like up front, but give it time. 

Heaton's post is heavy on philosophy, light on practical matters. Like, how exactly will Netflix turn a profit if the Starz deal costs $200 million to renew in 2012? I agree with the thrust of Heaton's argument that disruptors such as Netflix (or Netflix-like technologies) will eventually win the day, and consumers will eventually be able to get what they want, when they want it. But will Netflix (the actual, specific company) be the one to take us to that consumer nirvana? That's still not clear.

1 comments :: Will Studios Lose The War with Netflix?

  1. I just don't know how Netflix can't take us to that place. They have that key ingredient that makes ipods/iphones/iTunes so successful: a user-dependent, install base. Will their pricing scheme change? Most likely (tiered membership levels driving what on-demand access you have - such has higher prices for premium access). If we can agree that the future is on-demand access to content (films) when and where we want them - what single provider is going to make that possible if not Netflix? They already have on-demand, remote access to what is essentially "cross-platform" content. The alternative would be studios providing the content - in which case the access would come from different interfaces, rather than the single, everyone-already-knows-how-to-use, Netflix interface.

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