[Shengster]

I'm not long on Netflix, and here's why:

1. Netflix is at the mercy of media companies that control the content. Media companies can basically charge whatever they want for their content on Netflix. If Netflix can't afford it, they'll let their contracts expire and people will no longer get to see the movies and shows they want to watch. Unfortunately, the pricing hikes made consumers realize that it was extremely expensive to spend $16 a month to rent 1 DVD a week with streaming, whereas before at $10 they could justify the cost.

2. Netflix is in a crowded market with Amazon, Hulu, Apple, Google, and the media companies themselves. Sooner or later Starz, HBO, Warner Bros, and all these other media companies may decide to start their own version of "Netflix" and cancel all their existing contracts entirely. This would be more profitable for them, and would essentially kill Netflix.

3. Poor customer relations. The Qwikster snafu significantly hurt their brand, and a lot of customers (800k so far) have already left their service. Not only are they going to have to convince their existing customer base to stay, they need to convince more customers to join, as to drive revenue growth.

4. Netflix is predicting that its combined loss of customers and European launch will push it into the red next year where it may stay for all of 2012, according to a letter to its shareholders. http://goo.gl/3VdED

[bennesvig]

Look for Netflix to start pumping out quality original content. Just like HBO did. It's one of the best ways for them to stay competitive and differentiate themselves.

[nobody3141]

I doubt that anybody 'doubled up' and now pays for both the DVD and streaming option. The reason for the DVD service to exist at all is to do with Hollywood accounting and the way the licenses are counted - the idiocy of this has been discussed here before.

The studios can't start their own streaming service simply because they do not have the branding they think they have. This isn't the 1950s, nobody thinks "I must sign up for MGM's service they have all the best action movies". HBO and BBC might manage to make separate pay-for services but are more likely to simply agree an extra cost deal with Netflix in the same way they sell an extra cost package to cable. Does HBO really want to get into the writing and supporting software player business?

Then the studios have a problem that they are in direct competition to their main customers - the cable companies that would be delivering these shows over IP. Can we say serious throttling?

Sooner or later somebody in Hollywood is going to manage to get the childproof top off their Lithium tablets and realize that iTunes hasn't quite destroyed the music industry.

[AJ007]

Have you used HBO Go? It works. Its awesome. You can watch almost every HBO show, every episode from every season along with the newest episodes when they air. The catch, you have to have a subscription to a supported cable provider. Thus I no longer have it.

I think HBO has a very realistic shot of hitting it out of the ballpark. They have already proven they are capable of doing it. In a few years I expect most people will just subscribe directly to HBO.

As for Dreamworks, 20th Century Fox, MGM, Paramount, and every other movie studio having their own service, the economics won't work. They will make more per subscriber than they would from an aggregater deal, but they will have less subscribers.

A few other providers might be able to do what HBO can do. Niche providers, like Crunchyroll, will likely do very well.

I expect all of the movie & cable players will make moves on their subscription services. A handful will do a really good job and make out well, the rest will get to sell their libraries to Netflix, Amazon, and may be Google, and return back to what they do best.

[zacs]

Isn't HBO already in the "writing and supporting software player" business with its HBO Go apps? It's already circumventing business like Netflix today.

[dailyrorschach]

Kinda. In order to get HBO Go you need to be a subscriber, through your cable company. And not ever cable network is providing access to HBO Go, though I hear Time Warner Cable, is close to doing so.

[tsotha]

HBO is also coming to Roku as a separate pay channel.

[brown9-2]

I lowered my DVD plan to keep the streaming option (or make it more affordable).

[nknight]

> I doubt that anybody 'doubled up' and now pays for both the DVD and streaming option.

I did/do.

[ScottBurson]

Me too. As the WSJ column says, the streaming catalog just isn't adequate yet. I tried it for a few weeks, but then gave in. But I mostly hang out on the long tail; almost nothing I wanted to watch was available for streaming. My wife, on the other hand, streams a lot.

[nooneelse]

Me three. Much the same reasons.