Netflix (NASDAQ:NFLX) critics like to point out that the company doesn't actually make anything. The movies and TV shows that are the streaming video maven's lifeblood all comes from third-party sources. Yes, even the so-called "Netflix original shows." Orange Is the New Black comes from Lions Gate (NYSE:LGF), French media veteran Gaumont films makes Hemlock Grove, and so on.
The idea is simple: If Netflix doesn't actually make anything in-house, like Time Warner's (NYSE:TWX) HBO does, then the studios will eventually drive up prices and squeeze Netflix out of business. It's an HBO and Walt Disney (NYSE:DIS) world, and Netflix just lives in it until the studios decide otherwise.
But it ain't that easy to build a world-class distribution network, even if you're a powerhouse in the predigital movie world.
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