Just As Record Labels Resented Apple For Dragging Them Into The Internet Age, Movie Studios Resenting Netflix
from the amazing dept
It's been about five years since we posted a story about how the record labels were pissed off at Steve Jobs and Apple for building such a successful online music store in iTunes. The whole thing sounded counterintuitive. Prior to iTunes, the record labels had tried a series of dreadfully awful online music stores with horrible selection, crippling limitations, and ridiculous prices. While iTunes still isn't the savior that some in the industry think, it did drag the industry forward. And... for that, the labels resented Apple. It was basically because Apple had become the gatekeeper -- the position they were used to holding.These days, it sounds like the movie studios are going through the same sort of experience with Netflix. A recent story highlighted how the heads of major studios are getting upset about how successful Netflix has been with its online streaming offering. They literally are complaining that Netflix has been too good at getting customers to use online streaming:
"The problem is that Netflix is not the company we thought it was when we started doing these deals a few years ago. It has changed," said a studio executive who requested anonymity because the studio's discussions were confidential.Of course, as was the case with the labels and Apple, what's really going on is that the studios want a bigger cut. It's a case of overvaluing the content, and undervaluing the service. What the studio bosses refuse to admit is that it's the service that is working. There have been many attempts at offering streaming or download movies, and none of them did well, because they all sucked. They had the same content (or, in some cases better content), but since the services were so bad, no one used them. That seems like pretty clear evidence that it's the service that made this a success -- but they can't bring themselves to admit that. So, instead, they rag on Netflix and talk about how "unfair" it is that Netflix isn't paying them enough. And these are the same execs who complain about customers having an "entitlement mentality"?
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Filed Under: internet, movies, resentment, streaming
Companies: netflix
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Get used to it, or get busy digging your own graves next to the RIAA's.
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diggin your graves???
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185.45
http://www.google.com/finance?q=walt+disney
37.59
Good luck, movie studios!
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Mkt cap: 9.69B
http://www.google.com/finance?q=walt+disney
Mkt cap: 71.18B
You were saying?
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http://www.google.com/finance?q=netflix
EPS :2.65
http://www.google.com/finance?q=walt+disney
EPS 2.03
You were saying?
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http://www.google.com/finance?q=netflix
Gives me movies whenever I want
http://www.google.com/finance?q=walt+disney
Locks their movies in "vaults" until they decide I'm allowed to watch them
;D
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http://www.boingboing.net/2010/12/03/walt-disney-world-ca.html
The Services Trade Council workers at Walt Disney World are still negotiating for a fair contract and a living wage. They've released a longer version of the "MouseTrapped" video they put out earlier this week. It details more the living conditions for long-time Walt Disney World castmembers, some of whom are forced to supplement their groceries with donations from church food-banks.``
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D.I.S.N.E.Y.: Digital Individual Skilled in Nocturnal Exploration and Yelling
http://cyborg.namedecoder.com/index.php?acronym=netflix
N.E.T.F.L.I.X.: Networked Electronic Technician Fabricated for Logical Infiltration and Xenocide
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Content is King
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Re: Content is King
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Re: Content is King
They can grumble and whine all they want, but at the end of the day, Netflix is getting them tons of money that they don't have the means to get themselves.
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Re: Content is King
...by first fighting them tooth and nail, and then trying to enforce artificial restrictions such as windowing until they finally realised what their customers really wanted.
Their record might be a little better than the RIAA's, but their past has hardly been enlightened.
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Will they ever learn
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Google Pictures
Microsoft Pictures
NetFlix Pictures
This whole Netflix thing will force tech giants to produce their own content, Microsoft is quietly doing just that, they bought a lot of small successes recently and are bankrolling others, they are entering the production pipeline because they know they will not get any deals out of the legacy players without any leverage, and if Netflix don't want to end up like blockbuster they too should start financing the production side of things, they are the new gatekeepers because they are the ones that understand how to make money on the internet(well maybe not Microsoft yet).
It may take some time, but the old school studios and record labels are going under unless they drastically reinvent themselves which seems unlikely.
Other players are ISP's that will try desperately to acquire content providers, but they probably will sink their newly bought "assets" trying to make them look like ISP's offers and not internet companies.
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Wow! was my impression Gran Turismo 5 is cinematic and some are complaining it is to real.
Some of the actions games are so beautiful and full of life that I wonder why people what movies at all.
Top 5 games of 2010
http://www.youtube.com/watch?v=RQwPsDIoYyc
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Netflix+Comast=the same thing
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Re: Netflix+Comast=the same thing
If you're looking for more money for content providers, there are plenty of other options out there, not the least of which is doing it yourself, don't blame Netflix because they are a business, the deal would be far worse for you going through Comcast.
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I agree that Netflix sucks.
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The only thing I can see Netflix sucking at is the streaming selection and that isn't their fault. Why do you agree that Netflix sucks?
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Re: Netflix+Comast=the same thing
Go back into your hole.
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Good Job Netflix
Happy Netflix Customer!
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Hulu
Funny, I was just thinking that hey, the studios might do even more to make Hulu a crappy choice.
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Re: Hulu
Long live Hulu.
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Netflix Gets It
But what impresses me now is how Netflix still operates with the customer in mind. From their algorithm contests to the multi-platform streaming options, they make sure they're the best at what they do. And just this morning, I read that Netflix spends a lot of time and money on interface design and custom programming to ensure a great product. They experiment and try new things.
The article is here: http://mashable.com/2010/12/03/netflix-html5/
The reason they succeed is because they try new things and have the user in mind.
The reason the labels fail is because they don't care about the user as much as they care about more ways to control.
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Second, their customer service is fantastic. If they nickel and dimed their customers, they wouldn't be so successful.
Third, they designed their interface to be as simple and user friendly as possible. Their APIs let 3rd party developers create their own interface - which adds value to the service.
Fourth, the convenience; it's also a part of the service. Streaming is on demand - a service people love which adds value. But the queue is a fantastic way to "set and forget." Add movies as you can and they're sent in that order. There's little thinking involved. If a title is rented out, the next movie in line shows up. No fuss, no lines, no travel time, no store clerks to deal with, no stress. Easy. Valuable.
Netflix loves the subscription method because its constant money. Blockbuster has to kick, scream, and fight for someone to walk into their (expensive to maintain) stores. Target, Best Buy, and others - including Amazon - have to do the same to get buyers. They don't get a constant revenue stream from customers and its easy to see why Netflix has had an easier time of it. The whole business model is setup for success.
And as long as their service is the best, people will pay reasonable fees to them. And I would venture there are plenty of users who willingly pay more than $15 a month. BTW, does anyone know if Netflix discloses their average subscription dollar amount in their 10k filings? I'm sure it could be calculated if it isn't.
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Blockbuster should have squashed Netflix. Videos would come through the mail from your queue or you could pick up and drop off at any Blockbuster store for that extra convenience. And all at a lower price than Netflix. Their mistake was not seamlessly integrating the stores into the offering; there were too many glitches. Now Blockbuster is an also-ran in the entire video rental market.
Remember that Netflix had to build out their own distribution network. Sure they piggy-backed on the Post Office for branch and last mile but Netflix had to build out their own warehousing and routing structure. Wal-Mart entered their 900 pound gorilla in the ring with one of the largest and most efficient distribution networks in the world. What happened? No idea; probably a mix of too little and too late. Wal-Mart eventually ended up contracting out their rentals to Netflix before handing everything over and leaving the video rental market entirely.
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Minor correction
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