Movie Studios May Be About To Learn That Netflix Has The Leverage
from the over-and-over-and-over-again dept
You know how movies studios keep making the same movie over and over and over again with just slight changes? It seems that the entertainment industry simply has a problem recognizing that doing the same thing repeatedly won't lead to different outcomes. In particular, the entertainment companies continue to think that because they own the content, that they somehow have leverage against the new generation of distributors -- missing out on the fact that it was always the distribution side of things that gave them the leverage, rather than the content itself. That is, they're overvaluing the content and undervaluing the services that make that content useful. That's why the record labels were unable to realize that they handed Apple tremendous power over digital music sales. It's why the record labels still don't seem to realize that they need YouTube more than YouTube needs them.Now it's the movie studios' turn.
Jeff Nolan points out that the movie studios are apparently pissed off at Netflix, saying that they're trying to renegotiate deals on tougher terms. As Nolan points out, those studios may discover they have a lot less leverage than they think. If a studio pulls its movies from Netflix, those studios may find that it hurts them a lot more than it hurts Netflix, which has increasingly built a dominant position in the movie distribution space. Yet, of course, because these firms overvalue the content, they don't seem to be able to see this coming, despite all the foreshadowing...
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Filed Under: leverage, movie studios
Companies: netflix
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Foreshadowing
That's just how it works. To those not playing the game, it's obvious. If you happen to be worked into the script, you're probly screwed.
Just my 2 pesos.
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Yeah, I want to first find out which studio produced a movie (like I really care - I just want to watch the stupid thing) and then find their specific streaming site to watch said movie - after I pay their individual streaming subscription fee, of course.
One sentence in the comments for the original piece sums up the entire problem with the studio's idea perfectly -
NO ONE in the entire world wakes up and says “I feel like watching a Paramount movie today” and then will go the Paramount section of a retail store.[ link to this | view in chronology ]
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I've seen this play.
In Act 2, the studio tries to come up with a "competing" service. In every way inferior with Netflix, it falls flat on its face.
In Act 3 (set in Washington, DC), when the studio realizes it has only hurt itself, has wasted millions, and no one is watching its content that it won't make available, it'll say Netflix is somehow too powerful and must be regulated.
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If all the studios pull the content, netflix is in serious trouble very fast - no movies, no business.
If one studio pulls the content, they lose distribution.
Honestly, all the studios together could go off and do their own thing and pretty much duplicate out netflix and go from there. But Netflix can do what they do cheaper, better, and so on. It's another middleman in the process, but hey, what can you do?
I suspect that Netflix and the studios will come to a new deal that will pay the studios a bit more, and netflix will turn around and raise their rates on the back of it (and possibly even raise them slightly more than needed and blame it on the "greedy movie companies").
In the end, it can be a win for all (except the consumers who pay more).
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Even if streaming is cut off, Netflix will continue, usually with a message to subscribers about the changes it had to do.
Much like the stupidity of Viacom to Time Warner/Brighthouse cable company.
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if the studios leave, they could leave lock stock and everything else - including the DVD business. Honestly, the DVD business is just a "shiny piece of plastic" thing that is going away in the next few days, so all we are talking about is streaming or downloadable content right?
Without content, Netflix is "null". Sort of you like your posts.
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Re: Re: Re:
If they leave streaming, netflix won't care.
If "the studios" leave netflix, netflix won't care. Studios have more business to lose than netflix does by them leaving. this is because the "studios" are not what hold sway with netflix's core business. People are not going to suddenly flock back to blockbuster just because netflix is gone. It's the indie/hard to find films that netflix more business from, and other aspects of their community.
Meanwhile, if the studios lose more of their own business, thats not exactly a smart business decision is it?
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1. netflix is a proven business and business model. as a studio you can't just pull your content, you in turn lose viewers and also cut a stream of revenue. you can do it but its a pretty stupid business decision. some money vs no money
2. the studios lack any alternative site/distribution method.
i'd love to see them pull their content. just makes us consumers even more likely to go and torrent the movie to spite the industry and its lack of foresight, business models.
why is there piracy? because the industry lacks platform. netflix actually has a great platform/model but it seems like the industry is pissed because they can't control it (like they had previously prior to the interwebs)
just my .02 though.
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Actually, you are wrong about this. Netflix does not need the studios' permission to rent movies. They only need legally-purchased DVDs. The right of first sale guarantees their right to rent those discs?
We also know Netflix is willing to go to any lengths to provide a complete selection. How? Because they already have. When the Weinsteins signed an exclusive rental deal with Blockbuster, they cut off their distribution to Netflix. Without missing a beat, Netflix literally sent employees into Wal-Marts to buy copies of the movies to rent out. I am sure they have found other supplier solutions by now. Weinstein movies are still available on Netflix, but you don't get the "features" of rental DVDs, such as a ridiculous string of unskippable trailers and anti-piracy messages.
Another example is Redbox. Universal cut off their immediate suppliers. So, they found other supply solutions, and Universal titles are still available in Redbox.
Netflix is not going anywhere, despite what the movie studios might try. Our copyright laws might be ridiculous in some ways, but one thing they got right was not allowing content creators to price fix or control who gets to distribute beyond the initial sale.
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Leaking air from a tire.
No matter how much you try to educate them, they dismiss the advice completely and do whatever they want.
Usually coming back with their tails between the legs.
Sounds like Weird Harold, too!
Alas, let these idiots run off and do their stupid path in life.
I'm sure Netflix will wait to see the drooping tail, then dictate even better negotiations to favor themselves.
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Better Then Netflix
That way,..both corporate BS'ers are lose out.
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re:
If the studios pulled there films from the streaming service and I was netflix I would leave the movie in the listings. That way when someone clicks to watch it you could display a message about which studio pulled the movie and why.
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While the concept of them hoarding all of their stuff and not letting anyone distribute it seems stupid, this is essentially what they are doing in a limited way by doing stuff like that.
I mean, it has to be asked, what is the purpose of releasing a movie to be streamed via Netflix for only a certain amount of time? What benefit do they gain from this? All it does is make the content they supposedly want to distribute less available instead of more available.
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And, Weird Harold, pray tell us what the point of a studio without distribution channels would be?
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Re: And, Weird Harold, pray tell us what the point of a studio without distribution channels would be?
Ask Apple to do it.
Ask Microsoft to do it.
Ask Amazon to do it.
NEXT!
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Re: Re: And, Weird Harold, pray tell us what the point of a studio without distribution channels would be?
Give me money!
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Re: Re: And, Weird Harold, pray tell us what the point of a studio without distribution channels would be?
The biggest obstacle to doing it is that you have to compete with Netflix. They never stop competing. Do you remember an article a few months back when Netflix started talking about what they needed to do to compete with hulu? Hulu responds by removing itself from competition.
I know you don't believe in capitalism and free markets, but try to understand that industries owned distribution because there was no competition. Now there's competition to distribute.
The movie studios can pretend that hasn't happened, but it's out there. And everytime you see an exec complain about piracy, I hear someone say, I don't like competition, it lowers my profit.
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I'll just get it at the BAY!
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I don't know
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Re: I don't know
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Here is the problem
"Hollywood studios appear to be waking up to the threat posed by Netflix's instant-watch service, which the company says is being used by millions of its subscribers,"
Waking up to the THREAT... It's not a threat you ignorant buffoons! It's a legitimate way for people to consume your content.
It's gonna suck for us for a little while but I really hope Netflix takes the hard line and shows them who is in control. At some point you just have to shoot the horse if they refuse to be taken to the water.
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It's a shame that those companies can't compete and lower prices for the consumers. Or make more movies available.
And now the studios are trying to take what they have given these services away. Terrible.
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Re: Jason
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WH go back to where you came from. Do you have a fetish for advertising your stupidity or something?
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No originality at all!
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Not Fair
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I'm a Netflix customer, but without studios making movies and TV shows, Netflix would have nothing to send me.
Same thing with a movie theatre- if nobody made movies, the theatre would have nothing to show.
And YouTube would not exist without lots of people sending content to it.
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You truly believe that the content industry could do distribution on their own? They don't even seem to understand the concept of distribution.
It bears repeating. Without services like Netflix, Amazon, Vudu, etc... they are nothing.
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AHAHAHAHAHAHAHAHAHAHA...............
"Do it themselves"
AHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA.... (ie. even funnier!!)
Oh Harold, Harold, Harold. Such an active imagination.
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@greg re pulled movies
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Leverage
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now, with cable, satellite, and the telephone companies, offering multichannel products, ESPN can play cable against Directv, against Dish Net, against U-Verse and FiOS, and distributors have to pay or lose customers to a competing distributor.
distribution is king, only when it has some level of monopoly over that distribution.
when distribution has to compete against relatively equal distribution models, and the customer has access to multiple distributors, the balance of power goes back over to the content owners, who have a monopoly control over their titles, and can play one distributer against another.
Netflix had a monopoly over their distribution model, which was rent through the mail, and monthly charge as opposed to pay per video.
streaming will kill that monopoly the instant a 2nd streamer appears. cable, satellite, and the telcos, are already set up to compete head to head, at least on the new release side, especially cable with VOD. all that's keeping cable from competing now, is clinging to their traditional models of premium channels, (HBO, Showtime, Starz), their traditional pay per view VOD rental business, and wanting that 3 tiered revenue stream. (pay per view, premium, advertiser supported channels.
they switch the model for the newer releases from pay per view to all you can eat for one price, and Netflix says ouch. (but they would have to cannibalize their existing models, which is good for Netflix as a differentiated model)
content will always be a monopoly as to any individual title.
therefore, at least as far as blockbuster titles go, content will rule in the end.
distribution models will come and go, and they'll enjoy monopolies for only limited periods of time.
must have content will rule other than periods when a distribution model enjoys a window of monopoly.
theaters, HBO, video stores, pay per view, Netflix. distribution has gained leverage by innovating, and bettering the previous distribution model. once you can sit on your couch, push a couple of buttons on a remote, and access any title any time you want, from more than one distributor, i'm not sure where distribution can go, inovationwise, from there to wrestle control back for another window in time.
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