I can't believe that everybody's going to let Netflix
The Los Angeles Times is reporting that the digitally prolific movie rental service is striking a deal with Epix to offer up its releases through Netflix's fast-growing streaming option.
Epix is the nascent premium digital television service bankrolled by Lionsgate
It won't come cheap. Netflix is apparently willing to fork over nearly $1 billion for licensing rights to stream the flicks over the next five years. However, that's the kind of payday that Epix can't turn down, even if title availability for Netflix members on unlimited plans at no additional cost will eat into its own subscriber-based offering.
It remains to be seen if there will be a release window here, along the lines of Netflix holding back on DVDs from certain studios during the first four weeks of their retail release.
In the end, this is the kind of deal that no one else can match.
This could be a real game changer for Netflix. It has already inked deals with Relativity Media and Liberty Starz'
Who could scale this quickly? Nobody.
What does this mean for conventional movie channels including Time Warner's
The question will no longer be who can compete against Netflix digitally, but -- rather -- how is it going to go about carving up its empire.
Tiers for cheers
The only real knock of the Netflix model during its past few blowout quarters is that its subscriber base is growing faster than its top line. In other words, revenue per account keeps going down.
There's a simple explanation for this. New members are being wooed by the entry-level unlimited plan, where couch potatoes are allowed 24/7 streaming and can have a single DVD or Blu-ray out at a time. As more film buffs realize that they don't need to have three or more discs out at a time, they too will downgrade to the economical $8.99 monthly plan.
Netflix will have to do a lot of soul searching at this point. Does it let average revenue per user slide all the way down to $8.99, or does it do something about it by creating more digital value for its higher-priced offerings?
After all, we all know that the optical disc is dying. It's really just a matter of time. Do we really think that Netflix is going to settle for everyone flocking to the unlimited $8.99 plan?
I doubt it. What if some of the premium streaming content is reserved for those paying nearly twice as much for the flagship plan that offers three discs out at any given time? Not only would it translate into revenue per subscriber actually climbing for a change, but it would also give studios more leeway in licensing hot content to Netflix's higher tiers.
After all, studios don't mind Blockbuster or pay-per-view broadcasters renting out their releases because they are charging top dollar.
Poetry in motion
It's perfectly fitting that Netflix is only a handshake away from streaming Dinner for Schmucks at some point soon. The flick deals with corporate executives who compete to see who can bring the biggest idiot to a dinner party.
Let's face it, any rival that Netflix brings to the soiree is going to be a model idiot.
Netflix has pulled off this digital mastery in full view of its incompetent competition. As it brokered deals with TiVo
With every content licensing deal that Netflix strikes, its digital catalog gets that much larger while everybody else is still either trying to make piecemeal rentals work, or trying to launch fledgling subscription services along the lines of Epix.
What did everybody else not see? Did they not catch on to the heady subscriber growth, pitted against their own piecemeal failures or tardy arrivals in the cinematic buffet line?
Netflix had this game won years ago when everyone else was paralyzed.
Will Netflix ever stop growing? What can stop the company? Share your thoughts in the comment box below.