Tuesday, February 28, 2012

Netflix Not About The Flix

Movie distributors are trying hard to save their business. The digital distribution field has changed the very model of how content is viewed. And pay content distributors like HBO, Showtime, and Starz walk a fine line in licensing content to cable operators, OTT providers, and other distributors like Redbox and Netflix. So when the latest agreement between Starz and Netflix expires, Starz has decided they don't wish to renew.

Netflix has used Starz movies as a driver to pursue subscribers. But knowing that this deal was not long term, Netflix determined that a better future may be in TV shows and original content. "TV series now account for more than half of all Netflix viewing. That helps to explain why this Wednesday — the long-awaited moment when motion picture classics like “Scarface” and newer hits like “Toy Story 3” will vanish from the streaming service — is not the doomsday that it was once expected to be."

This strategy for Netflix of focusing on original content is reminiscent of what HBO, Showtime, Starz, Epix and others are doing in the cable space. As movies move from one distributor to another, they no longer best represent the lifeblood of the network. Today, HBO is known for Sopranos and Game Of Thrones, Showtime for House of Lies and Dexter, and Starz for Spartacus. So naturally, Netflix needed to get into the same space with their own original series, Lilyhammer. How else to define a network than by the original series it represents.

The flix may be less a part of the Netflix brand, but it still remains a piece of the puzzle. As digital has lowered the barriers to entry and enabled more ways to access movies, it better suits Netflix and others to use original content, both TV series and original movies, to attract a loyal customer base.