Sunday, March 27, 2011

Hollywood Continues Its Plan To Kill Netflix

It's really kind of amusing (and frustrating) to watch the entertainment industry look to kill every golden goose that comes its way. Any time a new offering is successful, the entertainment industry gets greedy and either tries to demand a much larger cut, more control... or it tries to kill off the offering because it has "too much power." We saw it with the labels, when they turned on iTunes (though Apple's been able to hold that together pretty strongly) and music video games. It's part of what's been driving the record labels to give Spotify such a hard time in signing a deal to bring the (rather successful in Europe) service to the US. And it's not just the recording industry. We've noted that Hollywood has now decided that Netflix has been too successful for them, and it's time to put the company in its proper place.

Thus, we're starting to see Netflix partners push back and start to limit what Netflix can stream. First it was Showtime pulling back from streaming its content via Netflix, and now it's Starz that's pulling back in a big way. That's pretty significant, because it was the original deal between Netflix and Starz that really jumpstarted Netflix's ability in the streaming space. The big studios have been complaining about the Starz deal for years, and it's not hard to see their hands in the company's decision to scale back its relationship.

It really is amazing. Some new service comes along that drags these industries -- often kicking and screaming -- into the modern era, and then starts making them lots of money. And suddenly the industry turns on them (and fans and consumers) claiming that these services are simply too successful and need to be cut down to size. It's really a case of the entertainment companies overvaluing the content over the service. They think that all the value is in the content, and if the services are making money and getting users, it's because they're somehow "exploiting" the content in unfair ways. On top of that, I really think there's a psychological issue, where the entertainment industry bosses still think that if anyone else is making a lot of money, it's "unfair" -- even if they're making plenty of money themselves.

Of course, these moves will backfire. It'll just make people on Netflix watch less of these companies' content... or seek it out from alternative sources that Hollywood probably likes even less.

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