Netflix takes a new aim at Hollywood. Industry changer again?
We all know Netflix as the streaming services which defeated Blockbuster. With their innovative business model they were able to build up a huge customer database making it almost impossible for competitors to catch up with them. With their limitation to content (provided by the studios) they decided to take action into their own hands with the production of ‘House of Cards’, ‘Orange is the New Black’ and such shows. They were distributed exclusively by Netflix and thus excluding the big tv studios. And now they are back with something even bigger: they closed a deal with the Weinstein Company to release next year’s sequel to the movie ‘Crouching Tiger, Hidden Dragon’ at the same time as they are released in the movie theaters. Reasons for Netflix to come up with this is to be a game changer in Hollywood. The chief content officer (COO) at Netflix, Ted Sarandos, says that Hollywood has to adapt to the changing demands from movie fans. They want to change the traditional method of film releases: theater, dvd or blueray and later on availability for streaming services.
I personally think this is a great step taken by Netflix. First the own tv-shows really showed a legal alternative and with the release of Hollywood movies at the same time as in movie theaters I think the illegal pirating of copyright protected content could be hold back. As you know in Holland it’s forbidden to download illegal content as of jurisdiction from the European Court. The problem in my opinion is that people are willing to pay for content, but don’t want to wait for the content to be released in their region for too long. This way, by distributing Hollywood movies all at the same time, I think it would prevent more people from illegally downloading content and thus the authors and actors would get paid rightfully for their work. Downside of the Netflix distribution would be the lack of income for movie theaters, but what do you think? If we would make a industry wide cost/benefit analysis would the benefits of legally distribution by Netflix outweigh the missed income by movie theaters? Would more people subscribe to streaming services? Would Netflix’s increased market power be a bigger threat?
Valentijn Valstar 360290vv