Netflix started to look like competition to media companies rather than another outlet for their programming once the streaming service announced its intention to produce original content. Now, the studios have changed their attitude.
According to The Wall Street Journal, several CEOs affirmed during quarterly earnings conference calls that Netflix would "expand their business rather than destroy it." For example:
CBS Chief Executive Les Moonves, who last September said the company was "trying to see what Netflix is," has emerged as one of the strongest cheerleaders. "Gee, it's great to be in business with them and they are terrific," he said on an earnings call last week.
Time Warner Chief Executive Jeff Bewkes on Wednesday called Netflix "a welcome addition" to the video market. Mr. Bewkes had more effusive praise the week before. When asked about a past disparagement— likening Netflix to a small Albanian army unlikely to conquer the world—he said he had a certain amount of "fondness" for the service, describing it as a new flavor of subscription television.
Although those original comments could be construed as a bit elitist (or even demeaning), at least these media execs realize the power that Netflix offers, especially for TV programming.
For frequent TV watchers, Netflix isn't quite a replacement for a cable subscription as it doesn't offer new episodes of the current seasons. Watch Instantly does provide yet another way for studios to have their content seen - in particular, older shows that might not even be in syndication anymore and thus forgotten otherwise.
Certain media companies, such as Showtime, have actually rearranged their deals with Netflix to reduce the amount of video streaming content. Additionally, Netflix's actual competitors (i.e. YouTube, Amazon Prime, Hulu Plus and TV Everywhere) are starting to look more enticing to Hollywood.
Considering that Netflix is close to having 25 million subscribers, it's obviously not doing poorly. It's also not surprising that media firms are uneasy about Netflix as there really hasn't been anything like it before. However, Netflix won't want to upset its media partners, and media execs need to recognize that Netflix is growing in popularity (and internationally). Thus, Netflix will probably be a good friend to have over the next few years.
Related coverage on ZDNet:
- Netflix: Bigger than cable. Too big for the Internet?
- For Yahoo, IntoNow fills out mobile part of TV strategy
- Netflix may begin offering family plans with multiple simultaneous stream options later this year
- Yahoo moving farther away from search with more original content
- Netflix app on Xbox 360 updated with Kinect support