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Hollywood film executives fear Netflix may conquer traditional broadcast services the way it did Blockbuster if someone doesn't keep them in check  (Source:
Film execs think the video-rental company is becoming too big too fast

As Netflix continues to grow in both audience and content, Hollywood film executives are feeling more and more threatened. 

In the past, studio executives have questioned whether Netflix could acquire a large audience without hit films or television shows, which is content they didn't think the video-rental service could afford. But now, Netflix has more than 20 million subscribers and has "sought-after" content available more than 200 internet-based platforms and devices like Xbox 360 and iPad. In the past year alone, the number of subscribers to Netflix has increased 66 percent. The video-rental company has even pushed competitors like Blockbuster and Movie Gallery to file for bankruptcy protection.

Netflix's ability to obtain such popularity so quickly has Hollywood executives scared, mainly because of how it influences the studio's businesses. For instance, Netflix draws sales from other areas such as airlines that offer in-flight internet access. If a person aboard the plane has Netflix, this takes a sale away from the carrier who is trying to sell movies on the plane as well.  

Film executives believe Netflix is having other impacts on the movie industry as well. For instance, movies on Netflix lose value more quickly than those that don't because "Netflix takes scarcity out of the equation" by offering movies to users anytime they want. In addition, film execs say Netflix discourages users from buying new releases. Disc sales are decreasing annually, and 30 to 50 percent of DVD's are still in their original shrink-wrap. While new releases won't appear on Netflix for years, users are okay with waiting until they do. 

According to Eric Garland, CEO of Big Champagne, which is a company that follows digital-media consumption, consumers quit collecting DVD's because it is no longer the new technology of the times.  

"The medium was creating this false impression that we had a real need to curate libraries of films," said Garland. "People built film libraries because they had never been able to own movies before. Even then, most of the movies only got watched once." 

Nevertheless, the film industry made a large profit for years off of movie sales, especially the DVD.  

"If we find out that people won't collect feature films anymore, than the business as we know it is broken beyond repair," said Garland. 

In response to Netflix's overwhelming popularity and its negative impact on the film industry, Hollywood film execs have decided to avoid Netflix completely. They will not "throw in" with the company and jeopardize conventional broadcast services. They feel it is their job to keep Netflix in check before it grows too large to handle. 

This doesn't mean that film execs are at war with Netflix or refuse to distribute films or television shows over the internet. The film industry plans to continue offering this content over the internet for attractive prices, but not through Netflix. 

Studio managers see Netflix as a company that offers the least-valuable material, and that the service will become a swap meet at best that users will become bored with eventually. 

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By happyfirst on 3/8/2011 11:44:47 AM , Rating: 2
>> While new releases won't appear on Netflix for years, users are okay with waiting until they do. <<

Doesn't that say it all? Movies are still to expensive to buy up front, especially considering most of them just are not worth it.

And why would I want to spend money for a so-so movie that is going to force me to sit through tons of ads? Fast forwarding gets old. And if I pull that movie out a year later, why do I want to watch such old ads???

Here's an idea. Find a way to sell movies to customers at a better price without all that junk at the beginning and in such a way that netflix can't mass order or go out and buy those versions either.

Another idea: how about some online store that lets customers get a better price on a movie if they can prove they also already paid to go see it in a theater? Design something around that.


But no, instead you just want to whine about why customer won't do things your absurd way when other companies offer better ways.

By Uncle on 3/8/2011 1:37:44 PM , Rating: 2
All your reasons stated why torrenting took off. Ever try fast forwarding an ad and preview based dvd. Last time I checked the price of dvd's havent dropped with all their ads in place. Isn't that what the software based companies throw at the consumers. You can use the software for free if you allow us to place ads in it.
The studios are greedy, they want it both ways. They receive money for for the ads and money from the purchaser. Plus you are a captive audience to the ads which they get paid more for.

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