Jack sent me a couple of interesting items in response to my last post, and I wanted to share them with you. First, one of Jack's friends is an industry insider who would prefer to remain anonymous. He has a good perspective on how Netflix could evolve.
He astutely points out that studios are highly unlikely to give Netflix rights which devalue their other distribution windows. Therefore, he believes that the bulk of Netflix' streaming catalog will probably continue to be films that are past the pay TV window. They will get some fresher titles from smaller distributors and perhaps Paramount and Lions Gate. Those titles will be the marketing hooks, but the older titles will be the bulk of their business.
This would allow Netflix to survive as a non-competitive addition to offerings from cable companies, and that means that cable companies would actually be able to offer Netflix streaming as an additional pay service that does not threaten their existing relationships. That's a potential win-win model for Netflix and cable. Consumers could get Netflix streaming for $9.99 on a stable SVOD channel, or for $7.99 through their broadband connection (with its inherent fluctuations in delivery speed). That actually makes a lot of sense -- probably more sense than Netflix trying to muster the money and power to fight HBO, Showtime, etc. for rights in the pay TV window.
With that said, recent comments from Reed Hastings and Glenn Britt don't seem to indicate that they see a natural partnership between Netflix and the broadcast side of the cable business. They both see Netflix as a driver for broadband services, but if they think it could evolve into a SVOD service on the broadcast side, they aren't saying so. It's possible that Netflix sees a cable SVOD model as potentially cannibalizing its existing service at a much lower margin, rather than creating incremental additional distribution. As always, time will tell.
Ok, that's it on Netflix for a while. I'll find some other interesting stuff to explore in the next post.