Netflix under pressure to land streaming content deals

Netflix under pressure to land streaming content deals

Summary: When it comes to content deals, Netflix may have to resort to that tech tradition of preannouncing products.

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Netflix has reportedly landed a deal to stream DreamWorks films in 2013, but the deal is just a small down payment on content library buildout.

The New York Times reported that Netflix has signed up Dreamworks away from HBO. But the deal doesn't start until 2013. As CNET News' Greg Sandoval noted the Netflix-Dreamworks combination is more spin than anything.

Rest assured you'll be hearing a lot more about Netflix deals whether they ultimately turn out to be spin or not. When it comes to content deals, Netflix may have to resort to that tech tradition of preannouncing products.

Why? Netflix has to keep you in the fold. The company is already struggling with its content library and needs to build it out. The problem is simple: The streaming service lacks the selection of the now separated DVD-by-mail offering, dubbed Quikster. Toss in a Starz deal that's about to run out and Netflix needs to add content fast---even if some of these licensing arrangements may be more than a year away.

All of these moving parts add up to an interesting sprint into 2012. Netflix has a customer crisis and needs to keep announcing content deals so you think there's a value. Content companies now that Netflix is in the corner and stand ready to collect royalties as the streaming movie service is forced to pay up.

Netflix CFO David Wells said last week that content costs will go higher. He said:

The terms of the deals that we're making are not in 10 and 15 years, they're two, three, four-year deals. So, to the extent that we grow, we fully expect to pay more to the content owner if we've doubled in size from what we originally did the deal. I mean, they deserve some participation upside in that and we fully expect that.

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13 comments
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  • Getting tired of constant streaming talk

    I'm sorry, but I just don't get streaming. The quality and sound just isn't there. Sure, when one is bored and looking for something to watch (and willing to watch something old), sure, no problem.

    $30 million PER movie? And these movies will just be that much older by 2013!!!

    I can only hope that streaming quality is much better by then.

    For now, I'm one of those patient guys, I will stick to DVD and Bluray. Seems like a waste to spend money on a nice tv or even a movie room to just watch OLD "streaming" content.
    happyfirst
    • RE: Netflix under pressure to land streaming content deals

      @happyfirst Netflix streaming isn't the best, but I have had good luck with the Zune streaming on PC and XBox 360. My Apple friends have good luck with the iTunes streaming. Why Netflix has so much problems with streaming I have no idea. They do get some newer movies, just not often, like Hobo with a shotgun, OMG, what a excellent sick, twisted movie.
      Broggy69
      • RE: Netflix under pressure to land streaming content deals

        @Broggy69
        Nothing can beat that Master HD sound and 1080p Resolution. Someday streaming will get better at a quicker rate than physical discs. I am also a patient guy and will wait for that BluRay disc. As for Hobo with a shotgun, it is getting queued.
        Anti Fanboy
      • RE: Netflix under pressure to land streaming content deals

        @Broggy69
        Streaming HD movies to my Xbox 360 through Zune works great. I'm sure it's not on par with a Blu-Ray copy, but I don't have side-by-side comparison set up, so it works for me! Netflix has crap selection though.
        kstap
    • RE: Netflix under pressure to land streaming content deals

      @happyfirst

      Netflix streaming quality is pretty poor, but some of the others are quite good.

      I've rented a couple movies on VuDu for example and the quality was excellent with full HD.
      SlithyTove
  • RE: Netflix under pressure to land streaming content deals

    I think they're done and it is a shame to witness. I could still see them buying Hulu but only to make themselves more attractive to a potential suitor.

    Heck, I would love to see somebody like HTC buy them to make them an exclusive content provider.
    slickjim
  • Dumped Netflix Streaming

    I ended up dumping Netflix streaming and went back to DVD/Blu-Ray, mainly because of the lack of watchable content. I found myself spending far too much time trying to find watchable content and not finding anything to watch. Now my DVD/Blue-Ray QUEUE has over 62 items with 58 in Blue-Ray. Netflix has lost so much streaming content over the last year and added very little watchable content, that the value was not there after the price hike. For $2 extra a month it was worth it at the start, especially with the added future value that additional content would be added, but over time even at $2 extra, the value disappeared. Too bad, since I have been with them since they started.
    TBeckner
  • Something doesn't seem right.

    At $30 million per movie, if that is right, that means that more than $1.00 of every subscriber (whether they watch it or not) is going to that movie. That's not very many movies per subscriber.

    And that much for a movie to be streamed most likely at lower quality and sound?

    This doesn't make sense.
    happyfirst
  • Must be your data connections

    I can honestly say that, 95% of the time, I have *no* problems with the streaming quality. The other 5%, at least half of the time I also have problems with my phone (VoIP) & data connections anyway. Of course, if you're trying to watch a non-HD program on your giant 50" flatscreen, then it won't matter how fast the streaming is, you're going to have quality issues. Don't believe me? Try hooking your old VHS up to the flatscreen, pop a non-Blu-Ray disc in, or even tune your TV to the non-HD network broadcast channel (i.e. without going through your cable/satellite provider), & see just how "clear" the picture is.

    As for the selection... *any* streaming service is going to be lacking in first-runs. What, do you think HBO/Showtime & the other premium cable channels get them any quicker? I doubt HBO Go shows movies before they're available on HBO itself... & they won't show up there until they're available on DVD. That's the choice of the *studios*; they want to make as much money as possible, & the revenue per viewer from streaming just isn't as high as the revenue from physical discs yet.

    As for selection... it just depends on what you're looking for. I use it to look for movies & TV shows I haven't seen, or that I haven't seen for years. I have to be careful about my queue, because I keep running out of space. But, then, that's just me...
    spdragoo@...
  • RE: Netflix under pressure to land streaming content deals

    Mobile OTT is the unsung issue in the Netflix streaming story. While access to more streaming content over mobile is great for consumers, service providers still aren???t profiting from this huge increase in data traffic. Avvasi's solutions work with service providers to maximize their revenue while still looking out for consumer's QoE.
    MobileVideoNews
  • The Elephant in the Room

    This whole discussion overlooks some factors:
    (1) Streaming just isn't "there" yet; maybe someday, maybe soon, but in 2011 it's not reliable & not clean.
    (2) Nobody ever considers the cost factor of bandwidth. Maybe right now you can just factor it into your flat internet fee, but you can be assured that in years to come, as use goes up across the board, the providers will be itching to raise the fees to cover their costs and make a healthy profit. Look for tiered rates and monthly bills that will make your gasoline bills pale by comparison. Already over *half* of internet traffic is taken by video.
    (3) The studios & other content creators will really start hiking their fees, once a tipping point has been reached, which will further add to your monthly tab.
    Streaming video may be the darling of the day, but in the long-term I see it as a degradation of the viewing experience, and increasingly expensive.
    EAR
    erapka@...
  • RE: Netflix under pressure to land streaming content deals

    It's no surprise that Netflix is in trouble. I have the duel service and want only the streaming but they carry about 10% of good flix you want to see by this method. I plan to cancel the DVD service however. Unless you are a brainless moron and rent movies like "Hobo with a shotgun", you will be disappointed with their streaming. Their foreign selection is their saving grace.
    FedTotallyUp
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