SO it was reported today that Netflix (NF) has blown a deal to continue a contract with STARZ, where all first run movies and content are streamed exclusively via NF. This means that Disney and Sony Movie studio movies will NOT BE AVAILABLE for streaming in the near future.
The original contract was for $30 million 4 years ago. Today the content is estimated at around 200-300 Million which is what NF offered STARZ. - supposedly. STARZ said that they wanted to keep the integrity of their premium content. What this really means...is they wanted to stop giving the milk away for free so to speak. With shows like Spartacus STARZ was put on the map...especially via NETFLIX. STARZ eventually saw that they could have had MANY MORE subscribers had they teased an episode or 2 on NF and required subscription for the rest. The result of the FREE popularity was STARZ making content no longer immediately available for streaming. Instead shows like Spartacus and Camelot...which sucked btw...were withheld for 90 days. During this time STARZ has a spike of subscriptions. Now they feel like they are a "player" in the premium market. I don't think so, but that's not the point of this blog.
The point is. NF bascially told STARZ to piss off, that they would find some other provider and have a better service. The problem with that is there is no one else willing to deal. HBO has said numerous times, "no"....not just no but hell NO. Showtime has said the same thing. These channels get more money from on-demand and bundled dollars from cable and satelite subscriptions. There is no way either would do an exclusive deal with NF. Cinemax- same thing, although it would be a teenagers dream to have the skinflix on streaming demand. With STARZ two of the biggest studios will be leaving and there isn't anything else out there to fill the gap.
Over the last month...
NF has split it's services and raised rates (60%) for no apparent reason. Citing only we want to stay in the DVD market. (which is Bull SHIT as DVD's are the money loser for NF) After the rate hike they tell customers we don't care if you leave because most of you will stay.
They make a formal public statment that they don't care if their streaming content is improved or that they don't have newer content. - presumably a precursor to the STARZ debacle.
They blow a major exclusive deal with STARZ and lose SONY and DISNEY STREAMING CONTENT. - and say so what...we'll get someother provider and do alot better.
Which is it? Do they care about streaming content or not? STARZ clearly called their bluff. In fact some would say NF doesn't have the cash assets to pay the 200-300million. It would seem they have been doing some funny accounting that make their books look more cash positive than they really are.
Here's the deal and I've blogged about this before. NF has changed from the underdog with a great service to the new Blockbuster. Over the last year and a half (or longer) they have systematically stripped away all of the user friendly things on their service just to perceptually and literally limit DVD and streamning content.
It is impossible to view the entire library on line or via streaming device. IT IS IMPOSSIBLE.
SUPER USERS....those the rate 10's of thousands of movies and are in the top 1 or 2% of rates will have the largest available content....but even that is limited based on rating and perceived "likes".
NF WANTS you to sign up for streaming only. They want to do away with DVD's. DVD's cost them recurring charges...where as streaming is a contracted $ amount. DVD's are tangable reminders to choose another DVD, where streaming is a convienence to be forgotten but paid for monthly.
NF has jumped the shark. Amazon, VUDU, HULU and others will finally overtake NF at their own game. Greed and getting away from core values that made them a great company and service is what's going to kill them. I'm still a customer...but after this STARZ thing I will look at other alternatives.