This Week in the Mercury

The Best of 2014

Music

The Best of 2014

The Year's Most Memorable Moments in Music


Savage Love

Columns

Savage Love

At the Neptune



Monday, September 19, 2011

Two Things to Keep In Mind While Whining About Netflix

Posted by Erik Henriksen on Mon, Sep 19, 2011 at 3:44 PM

netflix.jpeg

Something worth keeping in mind while you're ranting about Netflix/Qwikster (jesus christ "Qwikster" is a humiliating name for all involved):

Very few people understand the key underpinning of the Netflix “original” business model—a 1908 Supreme Court Ruling known as “first sale doctrine.” From Wikipedia:

“The doctrine allows the purchaser to transfer (i.e., sell, lend or give away) a particular lawfully made copy of the copyrighted work without permission once it has been obtained.”

Because of the first-sale doctrine, any DVD reseller, including Netflix, can basically buy a DVD at WalMart, and turn around and rent it to someone else the very same day. The content owners have absolutely no control over whether the copy can be resold or rented. Period. As such, Netflix has the ability to rent (via DVD) any movie which has ever been sold on DVD, and its costs are relatively fixed as a result of the retail price of the actual DVD. In some ways, it is a perfect storm.

Fast forward to digital streaming and all bets are off. More specifically, the first-sale doctrine does not apply. That’s right. For DVDs, Netflix’s rights are unlimited and its costs are constrained. For digital, its rights are constrained and its costs are unlimited. [Via. {Thanks @ninjahq!}]

And:

... The problem with streaming is that Netflix is reliant on Hollywood to provide great content for the company to stream. And while Hollywood warmed to Netflix’s DVD-by-mail service, the town still isn’t sold on streaming. Studios collect a lot of money by selling their films into exclusive video-on-demand and cable channel windows. They don’t want to risk that money by offering new movies on Netflix streaming. If you can watch the latest Harry Potter movie on Netflix streaming a few weeks after it comes out on DVD why spend the money for HBO?

... In order for Netflix to prosper in an increasingly competitive market, the company is going to need as many newer films and TV shows as it can gather. That means it’s going to be fighting against Amazon and Blockbuster for movies and Hulu for TV shows. Since (for now) Hulu is owned by several networks, they have little incentive to have their shows on both Hulu and Netflix when they are trying to sell Hulu Plus subscriptions.

Right now Hollywood mostly sees Netflix as a final window—a place to show movies that no longer have life on DVD, VOD or premium cable. [Via]

Personally, I'll be keeping both streaming and DVD-by-mail services for the foreseeable future; sure, the price jump sucks, but for what Netflix delivers, it's still a pretty amazing deal. While I watch a lot more streaming content via Netflix on Xbox Live than I do on via Netflix-mailed DVDs and Blu-rays—the addition of streaming Star Trek: The Next Generation alone fairly radically restructured my wee-hour viewing practices—the streaming pool is still far too shallow to rely on exclusively, and the image quality of their streaming offerings varies way too much, at least for this A/V snob. For those of us who care about hard-to-find movies and HD, physical media still has it nailed down—between Netflix discs and Movie Madness, Portland cinephiles shouldn't have any problem finding, like, anything—even if it's only a matter of time until all we're left with is the terrifying, all-consuming movie/game/music/food streaming service that Qwikster/Amazon/Hulu/Sony/Microsoft/iTunes will have morphed into, like some goddamn monster out of The Thing.

Comments (10)

Showing 1-10 of 10

 
Subscribe to this thread:
Showing 1-10 of 10

Comments are closed.

All contents © Index Newspapers, LLC

115 SW Ash St. Suite 600
Portland, OR 97204

Contact Info | Privacy Policy | Production Guidelines | Terms of Use | Takedown Policy