[ryanmolden]

Pretty sure the studios, once Netflix is all/mostly streaming will simply change the licensing costs to pilfer most of the profit, why wouldn't they? Without their content Netflix has nothing. Before they were insulated from this via the First Sale Doctorine and distribution through the mail. If they go all streaming the content producers can change licensing costs (already happening) and there is almost no barrier to entry (anyone can stream videos, see Hulu, Amazon, etc...) As a consumer I love Netflix streaming, from a business perspective it seems like a bad idea. Let's hope I am wrong.

[trunnell]

there is almost no barrier to entry

Yes, anyone can stream videos. But not everyone can buy the rights, which are sold in exclusive windows.

Every title is only licensed to one entity in each window. This system was designed for pay-TV channels that wanted exclusive rights, and the studios found that it was a good way to maximize revenue. So after a movie leaves the theaters, there are a series of these licensing windows, each lasting about 1-2 years. This is why a movie that's on HBO will never be on TBS simultaneously.

Buying content within a window is essentially like an auction. The highest bidder wins. It's possible to enter the market, but to do so you actually need a lot of capital to bid and win content.

studios... will simply change the licensing costs

Reed publicly stated that a major goal in the future is to pay studios more for content. And that's only fair as we increase the number of viewers.

Disclaimer: I work at Netflix.

[ryanmolden]

>Buying content within a window is essentially like an auction. The highest bidder wins. It's possible to enter the market, but to do so you actually need a lot of capital to bid and win content.

I think Amazon has sufficient capital to go to auction, also, in general, capital comes 'cheap', if someone has a business plan with a reasonable shot at success they can get VC money. If your expectation that a barrier to entry is purely capital costs, well...you better hope no investors want to back a competitor, there is plenty of money out there.

>Reed publicly stated that a major goal in the future is to pay studios more for content. And that's only fair as we increase the number of viewers.

Well, from a business perspective fairness isn't what matters, he should strive to retain as much of the 'pie' for Netflix as possible. His concession that he 'wants' to pay content producers more seems like PR, more likely he has no choice. It is good and fine to say you want studios to make more money on content, but I don't think history has shown either the movie or music industry care terribly much about how much profit their partners make, and they can drain any profit by increasing licensing costs anytime they want no? The more successful you are in streaming it seems the more you are exposed to this risk.

[brown9-2]

But without Netflix, how valuable is their content?

[ryanmolden]

They seem to have survived pre-NetFlix, and there are Netflix alternatives...so I would say 'pretty valuable'.

[Qz]

Blockbuster also 'survived' pre-Netflix and look where they are now.