Netflix subscribers received a bit of a shock last month when a host of titles suddenly disappeared from the streaming catalog; Sony films including Salt and The Social Network are no longer available for instant watch. It seems there is a bit of a contract problem, and it isn’t going to be the last problem Netflix faces.
According to CNNMoney Sony and Starz are butting heads over the limits that were placed on how many viewers could stream Sony content. The disagreement could force a contract renewal earlier than the expected end of the year expiration date, and Sony isn’t the only contract up for negotiation. When Netflix started out streaming content, nobody could have guessed how it was going to explode. Ok, well, some people could have guessed. Maybe most of us. But apparently the studios were caught off guard and have decided it’s time they should make more money off of the content they are allowing Netflix to stream. If Netflix loses much of the more recent streamable content, will subscribers stick around?
Netflix is doing well at the moment, with $342 million in cash available to spend as of last quarter – money that could go into paying the big bucks the studios will demand to keep their content available for instant watch. But there are other sharks with bigger teeth swimming in the streaming content waters, and they have even more money to burn. Both Amazon and Google are posting numbers in the billions, and they smell Netflix blood.
Netflix started it all; they brought us an entirely new way to watch movies at home, but that is unlikely to buy loyalty. We’re a demanding bunch, television viewers, and we expect fast streaming, quality content and the newest possible releases. And want it all right now, if you please. Can Netflix survive the approach of new streaming services with bigger budgets? Or have we seen the end of the red envelope? One thing is for sure – Netflix is swimming in dangerous waters.
