Let the Netflix Backlash Begin

By  |  Friday, March 25, 2011 at 4:26 pm

Netflix suffered a couple setbacks this week at the hands of Showtime and Starz. According to the Los Angeles Times, Showtime will no longer provide old seasons of “Dexter” and “Californication” for streaming, and Starz will delay streaming episodes of its new series “Camelot” by 90 days. Starz may also withhold movies from Netflix streaming in the future, the LA Times reports.

We’ve been hearing for a while that Hollywood is afraid of Netflix. For $8 per month, the service provides a huge library of on demand movies and TV shows, and has the potential to pull people away from existing revenue streams, such as DVD, video on demand and, in the case of Showtime and Starz, premium subscription television.

But as far as I know, that fear hasn’t produced any tangible effect on Netflix’s streaming service until now. With Showtime and Starz retracting content, we’re seeing the first signs of a Netflix streaming backlash.

If you’re a Netflix subscriber, this is bad news, of course, but there is a silver lining: In the future, Netflix may prove that it doesn’t need first-run television series from Showtime and Starz. Earlier this month, Netflix announced that it will stream its first exclusive TV series, House of Cards, in 2012. The show will star Kevin Spacey, and David Fincher is on board as director. Although Netflix has downplayed the significance of this development, I’m with Harry on this one: House of Cards could be a game-changer.

Still, House of Cards is no panacea. Netflix still needs great content from other sources for its streaming service to grow, but Netflix’s growth is what makes Hollywood so nervous in the first place. This is going to get ugly.

 
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9 Comments For This Post

  1. Jared Westfall Says:

    Its old thinking. Just like Time Warner vs the Networks. Think that streaming is different than renting a physical disc is idiotic. Just as the networks are freaking out about the Time Warner App on the iPad. The internet and cat6 cables are just that, cables. Its the way that all data is going to get sent. I gladly pay the fees to get access but when they remove my access I will pay for then I will get the content another way.

    Time for the companies to get their collective heads out of their arses. I mean I am willing to watch commercials on Hulu to get access to shows On Demand.

    Firs they claimed the 8 Track was a threat, then cassettes, then CDs when the whole time its staring them in the mirror.

  2. Mike Says:

    Showtime is basically deciding that they would prefer their viewers use BitTorrent rather than enrich Netflix. Not a great strategy.

  3. justinfadams Says:

    $8 a month is cheaper than HBO or other premium channels, and they deliver more value on every front, except for first run content, than these premium channels (watch from any device, large catalog, great user interface, no requirement to have cable, etc.). So while I'm not sure this House of Cards bet will pay off, I do believe that unless these premium channels off a similar value, they will continue to drive people to BitTorrent. That's how I'm going to get Game of Thrones (HBO hasn't made it available to people without cable).

  4. Paul Says:

    @Mike – It's not even that they'll bittorrent it. Unless you're really stuck on a particular Showtime show, you'll just find something else that *is* on Netflix. It's not like there's a shortage of content, people.

    A shortage of really good content, maybe, but where are you going to turn to find that, anyway? Probably not Showtime or Starz. But there's about a 97%* chance you can find some great back-catalog TV show on Netflix you've not seen and spend a good year on it.

    * 100% chance that I made up that statistic.

  5. JaredNewman Says:

    It's amazing how this applies in so many areas of tech/new media these days:
    http://www.wired.com/gadgets/miscellaneous/magazi

  6. CohesionCubed Says:

    I already skip 98% of the movies and shows I see to get to the 2% I actually want to watch and enjoy. I'm going to have to agree with Miniardi that it's not that big of a loss for Netflix users.

  7. Perry Says:

    We have had Dishnetwork for many years, and just coming into the new year found our month fees going up over twice the amount. Wail the programing sucks with many channels of garbage not worth watching, or older re-run shows, And I guess thats fine, to sit and watch an old movie or check out the news. But then we seen a HD Google-TV box, It has netflix, news, internet, everything we could want and all in HD 1080 quality, We have found our selves chooseing the movies we want to watch, It seems the future is changing and this is the way of the future.

  8. Perry Says:

    We got into netflix with our Google-TV box, I think Google-TV is changing the way people watch TV and serf the interent in 1080i High Definition. I do believe the more people who turn to google-tv the more they are going to drop Cable and Satilite TV sevice. And with it goes HBO, Showtime and all the otheres.

  9. para_chutes Says:

    We have had Dishnetwork since 1994, going into this year our service has more than doubled is price. When I seen Google-TV box's, it has netfilx and the ability to surf the internet all in 1080i HD with HDMI connections, It reminds me of the old Web-TV box's of the 90s only this is the true marrage of TV and the internet since its all High Defenition. We love it and are thinking about dumping the satilite-TV because netfilix alows us to watch what we want, when we want and at a big cost advantage. I think Google-TV could replace all Cable and Satilite TV box's, Seems the future is changing and internet TV is the new wave of the future.