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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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RE: Don't blame Netflix
By Fracture on 3/8/2011 2:00:19 PM , Rating: 2
They really are hilarious, but its not about money. Money is just a byproduct of control, which is what the entertainment industry is really fighting for. They could offer some tangible proof or figures, but the truth is that more movies are being made now than ever before for lower prices. The cost of production continues to sink as special effects become better and cheaper themselves, and as costs of distribution vanish thanks to digital copies.

Let the middlemen die.

RE: Don't blame Netflix
By MrBlastman on 3/8/2011 2:14:25 PM , Rating: 3
That's a good point--about their control. They really are after that, it is apparent, and can not stand the thought that they might lose a fair amount of it.

From my perspective, Hollywood (and the MPAA) forgot somewhere in the last 25 years that it is us, the consumer, who truly are in control. We are--as we control the flow of money into their pockets.

It seems they need to hire an economist to set them straight.

RE: Don't blame Netflix
By FITCamaro on 3/8/11, Rating: -1
RE: Don't blame Netflix
By Gzus666 on 3/8/2011 3:34:38 PM , Rating: 4
Do you have to be a knob in every article? You must be horrendous to be around in person for any reasonable amount of time, constantly sticking political stupidity into every conversation possible. We get it, you blindly wave your right wing nut job flag.

Is it really that hard to just be a normal person and accept that right or left, they are both wrong in some way?

RE: Don't blame Netflix
By EricMartello on 3/8/11, Rating: -1
RE: Don't blame Netflix
By Spuke on 3/8/2011 5:49:08 PM , Rating: 2
it's a matter of there being too many self-serving pigs in Washington whose only real agenda is what they can do for themselves.
I agree but you're off topic. Sorry.

RE: Don't blame Netflix
By EricMartello on 3/9/2011 2:41:26 PM , Rating: 2
Hardly off topic. If it involves the MPAA/RIAA it is tied to may not be able to see the connection but it is there.

RE: Don't blame Netflix
By FITCamaro on 3/8/11, Rating: -1
RE: Don't blame Netflix
By Spuke on 3/8/2011 5:54:26 PM , Rating: 1
Yeah I guess I should be a moron like everyone who just says "F*ck it" and let whatever happens happen.
Sure but we're talking about Netflix and the MPAA here not politics.

RE: Don't blame Netflix
By Gzus666 on 3/8/2011 11:15:47 PM , Rating: 1
Right, cause you will change the world on a blog. Good job you go getter. No one was ever swayed by snarky comments in any medium. If you want to change things, go run for office and quit being a tool. Fix government instead of pissing and moaning about it. Oh, I forgot, it is easier to just whine about it.

RE: Don't blame Netflix
By FITCamaro on 3/8/11, Rating: 0
RE: Don't blame Netflix
By retrospooty on 3/9/2011 7:15:38 AM , Rating: 3

"Do you have to be a knob in every article?

Answer = Yes

You must be horrendous to be around in person for any reasonable amount of time, constantly sticking political stupidity into every conversation possible. We get it, you blindly wave your right wing nut job flag.


RE: Don't blame Netflix
By djc208 on 3/9/2011 7:02:09 AM , Rating: 2
They didn't learn from the music industry that people want the content to fit their life and are willing to pay for that. We've been living with the old model because we had no other option.

If you tell me I can own the BD but not the content on it then why buy the disk if I can rent the content from Netflix for less and access it more easily from any device that supports it?

Add in that fact that there is so much content out there in various price formats and it becomes easy to go without the latest movie for a little while longer.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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