Studios Concerned About How Netflix Is Changing Their Home Entertainment Business Model

Dec 13, 2010  •  Post A Comment

While Netflix was once viewed as a harmless DVD-rental operation by the television and cable industries, that viewpoint has sharply changed as the company has seen its stock nearly quadruple this year while hastening the decline of DVD sales, according to The New York Times’ Tim Arango.

Time Warner Chief Executive Jeffrey Bewkes, for one, says Netflix’s growing influence has changed the way the media company approaches it. For instance, Bewkes now personally makes decisions about Netflix deals, while two years ago a junior employee would have signed off, the article points out.

With cable subscriptions in the U.S. down this year, a trend some blame on Netflix expanding its television offerings, some studios may become reluctant to make any deals, the story says. "Once you put it on Netflix, you really can’t sell it anywhere else,” Bewkes said.

Ted Sarandos, the chief content officer for Netflix, said the concerns reflect the media industry’s attempts to understand how television will be watched. "“They are not very sure of the outcome of what appears to be a very major shift in consumer behavior," he said.

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