Netflix (NFLX 2.09%) 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 (LGF +0.00%), 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 (TWX +0.00%) HBO does, then the studios will eventually drive up prices and squeeze Netflix out of business. It's an HBO and Walt Disney (DIS 0.49%) 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.
In this video, Fool analyst Anders Bylund presents a quote from DreamWorks Animation (DWA +0.00%) CEO Jeffrey Katzenberg, which explains the real balance of power in less than 10 seconds.
