Is the Future Secure for Netflix?

Netflix Loses Starz, Adds First Original Series.

You may have noticed some changes if you’ve visited your Netflix page today. Along with their change in privacy policy, Starz Play has left your navigation bar and it’s taken all it had to give with it. Following an exciting first quarter, 2011 turned out to be not so good a year for Netflix. Movie studios are making a great effort to avoid having their films be available via Netflix’s not-so-profitable-for-them streaming service. Many studios will not release their films to Netflix streaming until after the film’s premium channel run is up. Which means most new releases will not be available through instant streaming until 5 years after their theatrical release.

The Starz Play screen; a sample of what Netflix has lost

Starz worked as a fantastic agreement for Netflix to shorten their wait period for new releases. Once a movie appeared on Starz, it was also available through Netflix. Though Starz had other benefits as well, their original programming (Party Down, Spartacus) was also a draw for Netflix subscribers. Starz also had a deal with Disney, in turn giving Netflix access to their films (Toy Story 3 included) as well. These large chunks of the appeal for Netflix are now no more.

What this means for Netflix is that it’s streaming service is now classic, foreign, and current television shows, though nothing actually in its current season. Recent and classic independent films, documentaries, and foreign films. Lastly, studio films over five years of age. Is that enough for Netflix to continue to survive? Not to mention Netflix is starting to see competition spring up left and right with streaming services available through Amazon, Hulu+, and more. Each service have different deals with studios and distributors so each have their good and their bad. Also, premium channels are now offering streaming as part of their premium service. So how will Netflix plan to overcome and remain in the driver’s seat?

Netflix's first original series. Available today through instant streaming.

Their plan begins with creating their own original programming, beginning with today’s release of Steven Van Zandt in Lilyhammer. Next year, we can expect from David Fincher and Kevin Spacey; House of Cards. Also in 2013, we can expect the much-anticipated return of Arrested Development.

Is this enough to save Netflix right now, essentially replacing a good chunk of their content with one original show and the promise of more to come? Perhaps not in the short-term, and I’m sure there will be a dip in subscriptions. There is hope for Netflix though, television stations have been helping both themselves and Netflix by releasing their more serialized shows on Netflix, giving viewers enough time to catch up before the new season. (I expect a huge bump in Mad Men‘s ratings this season.) Also, names like David Fincher and titles like Arrested Development do hold a lot of weight with Netflix’s core demographics. Though Netflix has certainly brought out the big guns from the get go, it can’t afford to keep up this heavyweight momentum, and it wouldn’t surprise me to see Netflix introduce subscription contracts for their services in the near future.

Is the return of the Bluth family worth $7.99 per month to you?

Though I believe that in the end, the studios are fighting the same losing battle against instant availability that the music industry did. That doesn’t mean that Netflix itself will be the service which claims victory. Netflix is a very early contender in a long battle and is now facing it’s darkest hour yet. For now it seems that Netflix needs more original content if it wants to maintain dominance, but when the big names eventually simmer down we’ll see what we end up with from Netflix, and if people think it’s worth their $7.99 per month.

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2 responses to “Is the Future Secure for Netflix?

  1. I kicked Netflix out of the driver seat for my streaming and disc rental needs when my employer, DISH, introduced me to Blockbuster @Home. Not only can I rent movies and video games by mail, but I can also stream and it costs me $10 a month, less than if I had both of Netflix’s services. Plus, now that I have a Hopper, I can stream to my HDTV too. DISH has created the “everything I could ever need” package and the Hopper has been the final touch. I can record up to six things at the same time with the Primetime Anytime feature and watch any of my recordings on any of my connected HDTVs since the Hopper is a whole-home HD DVR. I think that Netflix is doing themselves some good by picking up Arrested Development, but they’re going to have to do a lot more than that to make up for losing Starz.

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