Why Hollywood hates Netflix

Netflix streaming, on the other hand, offers perpetual access to everything in its catalog. For anything Netflix streams, the need to purchase a copy disappears, at least until the license expires. Thanks to iTunes and Amazon Instant Video, studios still have a way to distribute their content a la carte without needing to rely on DVDs or other physical media. But Netflix and streaming in general are a much less compelling marketing channel for that content. Streaming encourages binging and grazing, captivating you with seemingly limitless choices. The only way Netflix “advertises” movies or shows is by forcing people to go out and buy stuff Netflix doesn’t have.

Right now, each studio must make its own calculations about how much it can make in licensing fees from Netflix and other streaming services versus marketing and selling its content in other ways. In the meantime, however, Netflix isn’t waiting around. By investing heavily in its own self-produced shows — a move that corresponded to a big uptick in subscribers over the pat year — Netflix frees itself from Hollywood’s fickle financial decision-making. The more and better shows it makes, the more its Hollywood movies and shows act as a sweetener for subscribers rather than the main attraction.

vía HBO Makes More Money Than Netflix — For Now | Wired Business | Wired.com.

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