Time Warner doesn't get it

Rich

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Time Warner Views Netflix as a Fading Star

For the past year, executives at big media companies have watched Netflix with growing resentment — for its success in delivering movies and television shows via the Internet, for its stock price nearly quadrupling, for its chief executive being named businessperson of the year by Fortune magazine.

Now many of the companies that make the shows and movies that Netflix delivers to mailboxes, computer screens and televisions — companies whose stocks have not enjoyed the same frothy rise, and whose chief executives have not won the same accolades — are pushing back, arguing that the company is overhyped, and vowing to charge much more to license their content.

“It’s a little bit like, is the Albanian army going to take over the world?” said Jeffrey L. Bewkes, the chief executive of Time Warner, in an interview last week. “I don’t think so.”

[...]

“At $8 to $10, it doesn’t have the economics to support high-value programming,” he said.

As evidence of Netflix’s growing importance, Mr. Bewkes said decisions about deals that might have been made two years ago by a junior employee in a studio’s digital division are now reaching his desk. For example, Mr. Bewkes himself approved a deal to allow Netflix to stream “Nip/Tuck,” a drama produced by Warner Brothers’ TV studio.

The most contentious clash between Netflix and the media industry will probably center on Netflix’s ambition of expanding its television offerings.

Netflix announced last week a new deal to stream ABC shows, like old episodes of “Lost” and “Desperate Housewives.” But cable subscriptions in the United States are down this year — a trend some attribute to Netflix — so studios will be reluctant to make any deals, like offering current episodes of shows that would upset cable TV economics.

“Once you put it on Netflix, you really can’t sell it anywhere else,” said Mr. Bewkes.

Even if Netflix raised their monthly subscription rate for streaming content to $20/month, it's still a helluva lot cheaper than pay per view through cable and you don't get the same movie playing 50 times per month like on so-called "premium channels."
 

wavemagnet

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Lets hope Netflix stays affordable. These giant money grubbing companies just can't believe people are tired of being robbed every month.
 

Rich

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I'd pay Netflix $20/mo for their service. If you watch just five movies per month, you still did better than using typical cable pay per view.
 

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