Their hope for the future is that the sellers are also middlemen. The studios/networks distribute and in some cases finance the content, which is largely produced by production companies (which often represent independent contractors, aka Talent).
The game Hollywood talent is starting to play is to flirt with companies like Netflix as sources of financing and distribution in order to play them off the studios. Talent benefits from more players on that side of things, which is why Netflix is able to get someone like Kevin Spacey (whose production company is quite forward-looking).
Netflix has a lot of cash to throw around, even by Hollywood standards. So far they're using it pretty intelligently, in a long, broad game.
They had an aborted earlier attempt with the DVD business to do something similar, Red Envelope. That was going to be their own distribution company. They were in here LA for a couple years, but from what I saw of them, the people running it were the wrong people. I think they've found the right people for their content business now. Seems to be working well, anyway.
They're also playing their strengths well, doing series instead of motion pictures for the most part. Series are binge-able, and that's something they have the networks and studios don't.
It's my perception that Netflix sort of triggered the start of binge watching as a phenomenon when they bought Lost for $40 million. There was a cohort who binged through that and talked about it, and then that got the idea out there. Then Breaking Bad was an interesting example when binging on Netflix and Amazon sort of retroactively moved the show from cult to huge.
They have lost exclusive distribution partners in the past, most notably Criterion (who went to Hulu) and Starz! Those hurt them, but they seem to be coming back from it.
The game Hollywood talent is starting to play is to flirt with companies like Netflix as sources of financing and distribution in order to play them off the studios. Talent benefits from more players on that side of things, which is why Netflix is able to get someone like Kevin Spacey (whose production company is quite forward-looking).
Netflix has a lot of cash to throw around, even by Hollywood standards. So far they're using it pretty intelligently, in a long, broad game.
They had an aborted earlier attempt with the DVD business to do something similar, Red Envelope. That was going to be their own distribution company. They were in here LA for a couple years, but from what I saw of them, the people running it were the wrong people. I think they've found the right people for their content business now. Seems to be working well, anyway.
They're also playing their strengths well, doing series instead of motion pictures for the most part. Series are binge-able, and that's something they have the networks and studios don't.
It's my perception that Netflix sort of triggered the start of binge watching as a phenomenon when they bought Lost for $40 million. There was a cohort who binged through that and talked about it, and then that got the idea out there. Then Breaking Bad was an interesting example when binging on Netflix and Amazon sort of retroactively moved the show from cult to huge.
They have lost exclusive distribution partners in the past, most notably Criterion (who went to Hulu) and Starz! Those hurt them, but they seem to be coming back from it.