David Chen, of Slashfilm, wonders if Netflix is going to stream itself out of business:
Many of Netflix current content deals — deals that have made Netflix Watch Instantly such an appealing option for many subscribers — were cut during a time when people had no idea what the hell digital streaming was or how to value it. This is why we can get Starz movies and episodes of The Office on Netflix; Netflix cut a backdoor deal with Starz for the streaming rights to its content, and its content deals for TV shows happened before properties such as Hulu or ABC.com were as big as they are today. When these deals come up for renewal in 2012, you can bet that the price for this content is going to be much more onerous for Netflix.
In addition, Netflix faces increasing competition from a variety of sources. HBO is launching its own portal, HBO GO, which will allow HBO subscribers to stream HBO movies and original series. Meanwhile, Amazon is launching a Netflix competitor, and the new video games service OnLive may soon offer movies to subscribers. Time Warner CEO Jeff Bewkes (who, to be fair, has a horse in this race; Warner Bros. is an investor in OnLive) recently declared that Netflix hasn’t shown it can compete seriously in the content distribution space.
The one thing Netflix competitors don’t have is that brand recognition and brand reputation. Also, Netflix has always proved to be a company sharply ahead of the distribution curb. Their move to streaming content wouldn’t be done without due diligence, without knowing it was a smart move.
At the same time, Netflix gets online, digital distribution. HBO is making a huge mistake by only offering their content to existing subscribers; Hulu has become an established player, but I don’t trust their leadership and being beholden to three networks as having consumers best interests in mind.
Amazon and Microsoft and Apple should be bigger players than they are, which strikes me as curious.