The Great Depression of Netflix: The Service Will Lose 2,000 Movies
Netflix has come a long way since its 2011 restructuring, which separated DVD and streaming services and increased rates. Some companies lost customers with changes such as those, but today, Netflix is thriving with 33 million subscribers, according to CNN Money. While it revamped and refined its core business to focus on online streaming, now it’s looking to become an original content powerhouse.
However, Netflix’s achievements showed networks, movie producers and other companies there is a lot of money to be made in the streaming world. One of the downsides of Netflix’s success is the service may lose movies whenever studios decide to start their own streaming sites.
The Success of ‘House of Cards’ and ‘Arrested Development’
“House of Cards” was a risk on Netflix’s part. Streaming providers had even thought of funding original programming. Netflix took a gamble and won big, attributing much of the recent growth to their original programming strategy. Netflix also gained exclusive rights to produce a new season of canceled Fox show “Arrested Development,” which was also a massive success, with Netflix stock currently trading at an all-time high, according to Forbes. The reintroduction of “Arrested Development” was such a hit, Netflix is willing to go right into another season if the cast is interested, according to Wired. Netflix expects to increase its spending on original programming by 15 percent of its total revenue.
Original Content in Production
Netflix has plenty of plans for original content already. It has the second season of “House of Cards” in the works, a new “Lilyhammer” season and several other shows. Ideally, Netflix is looking to produce 20 shows over the next several years. Production does cost Netflix a great deal, with $100 million going to “House of Cards” production, but Netflix states there are approximately the same amount it would cost to strike a deal with one of their exclusive content providers. As long as Netflix subscribers show appreciation for original programming, Netflix will continue to move more into the role of a broadcast network.
Other streaming services, such as Hulu and Amazon, have also begun creating original series. Amazon has an innovative way of figuring out which series to produce: showing pilot episodes through Amazon Instant Video and letting users decide on the ones that make it into full production, according to Next Web. It remains to be seen whether crowdsourcing production is a great idea, or one that’s going to backfire.
Massive Movie Loss
Not everything is on the up-and-up for Netflix. Netflix lost nearly 2,000 movies in May 2013 to Warner Archive Instant, a $10-per-month streaming service featuring titles by studios MGM, Universal and Warner Bros., according to Mashable. While many of the movies disappearing from Netflix were not the most popular or highly rated selections, the drop is substantial. If more studios decide to go this route, the streaming market may become fragmented over countless studio-specific services.
Netflix has refined their service over the past year so the learning curve for studios who don’t focus on streaming as their core business will be harsh. One of the reasons people abandon cable television is due to cheaper entertainment options offered by Netflix and similar services. According to Cable-TV.com, basic TV packages start at around $30 monthly. If every movie studio has its own streaming service with exclusive titles, movie fans will have to pay far more than they ever have before to see movies they want.
Are you in favor of movie studios creating streaming services? Leave your opinion in the comments.
Photo by Flickr user igrigorik.
Authored by: Amanda Wilson; Amanda is an entertainment writer from San Antonio.