Monday, May 9, 2011

If You Can't Beat Em (Netflix), Join Em

There is something to be said for content companies to not also own the platform. They become more adaptable to a changing technological environment and hopefully quicker to recognize, strategize, and act. "As they delivered their quarterly earnings reports last week, companies including Time Warner Inc. and CBS Corp. were doling out praise for Netflix." Neither own a cable distribution platform, so each see that it is most important to follow the customer. And the customer is cord shaving and cord cutting. It also makes sense to be accessible everywhere so that your content is easy to find and view. Lastly, these media companies also hope that it is not a zero sum game so that doing deals with Netflix and others, along with cable operators, means incremental revenue gains.

It will be this philosophy that if you can't beat em, join em, that will entice more content companies to pursue a streaming platform along with its cable distribution. With customers flocking to Netflix and their subscriber base at 23 million and growing, a deal with Netflix doesn't seem like a bad thing.