Tuesday, November 1, 2011

Will Streaming Movies Survive?

Hey Netflix: I'm a little worried about you. You've had a few mis-steps lately in pricing and marketing. Some of the big kids didn't want to play any more. Starz took their ball and went home. The press has declared you dead or dying. That may be premature, but as I said, I'm still a little worried.

Let me be clear. I'm not even a Netflix subscriber and I don't really care how well Netflix does or even whether it survives. My interest is a little broader than that. I want there to be some evolution in entertainment content delivery because I want a future with a greater diversity of content, more choices in how I pay (a la carte, big packages, smaller custom packages, etc), and more choice in how I consume – I want to watch on a big screen television, a laptop computer, a handheld mobile device, and whatever comes next, and I want interactive possibilities.

Right now, the most desirable content comes from a small number of big media content creators. These big movie studios and television production companies know that they have a stable and favorable financial model with the major US cable television distribution companies, and they appear to be skittish about the Internet generally. More than that, they are wary about allowing the creation of powerful new players in distribution who could become too powerful too fast and forever change the balance of power and flow of dollars. They don't want any one or two companies to dominate (Apple, Netflix, I'm looking at you). But though they may be old dogs, the content creators and rights holders can learn new tricks. They understand the value in having a few good partners for distribution of content to hundreds of millions of viewers. They have that right now. They need to maintain a viable market for their content and if that market is one that a few years from now is predominantly Internet distribution (with appropriate access control) rather than traditional cable television networks, so be it.

Starz and Disney wouldn't want just one bidder for their content in the cable television world. Why would they accept just one in the Internet world? But if Netflix, Apple, Amazon and two or three others all want their content, there could be a vibrant, competitive market.

What do you think? Will Starz, Disney, HBO, and all the rest embrace Internet distribution if sufficient competition exists? Leave a comment and let us know what you'd like to see happen, and what you think will happen.

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  1. Wow, aren't you being just a bit kind on a legacy industry? Aren't they really what's blocking innovation in terms of new content production means and delivery? "Right now, the most desirable content comes from a small number of big media content creators." Right! That is the problem. When I was in grad school, I took a great class in problem-solving. The underlying lesson from that entire term was "Be very, very sure you identify the core problem before you apply any solution." Maybe if we broke up the small number (read: monopolistic anti-capitalists) who own it all, you would see a burst of new ways to create, market, and deliver programming...didn't we try that once before with these guys????

    You know, back when I worked in cable, I had a poster that showed the 5-6 corporations that owned the media in this country -- that kind of ownership not only stifles innovation in entertainment, it just plan stifles our democracy.

  2. Excellent points, Jlpwal. In fact, you might like my blog from back in May in which I talk about democratization of content creation. Check it out at: http://rapidgroove.blogspot.com/2011/05/watching-tv-without-tv.html

    I was carelessly using the "desirable content" phrase in this blog to mean "most able to generate revenue." I'll grant that those aren't precisely equal.