When I was in the VOD business many years ago, the weak link in the business model was access to content (film and television distribution deals). Flash forward to today’s world of video streaming – nothing has changed.
Now that Netflix has separated into two companies: Netflix for streaming and Qwikster (side note: really dumb name, but that is a different discussion), availability to licensed content for both companies is going to become even more important. Two years ago, Netflix signed an agreement that delayed when it could start offering many new releases, namely those from Universal Studios, Warner Bros and Twentieth Century Fox. This gives on-demand providers via cable and satellite a 28-day head start. Given their ties to some studios, the reason for this anti-competitive maneuver is clear.
For Netflix, these agreements were supposed to help build up its catalog of available content for streaming. Earlier this month, Netflix lost valuable future content from Starz Entertainment. Their current distribution deal is set to expire February 2012.
I love streaming video and live in a household that consumes way more than the average amount of available video. Netflix is one of our main sources, but it isn’t the only way we access films and old television series. As Netflix has shortened the amount of time some content is available for streaming, delayed other content and is about to lose even more content, Hulu, Comcast, Amazon Instant Video and other options have come on strong.
Netflix will be around at the end of 2012, but it is yet to be seen if it will be able to bounce back into the growth mode it had only a few months ago. The company has put its eggs in the streaming delivery basket. Now is the time for it to guarantee it has and will have the available content consumers want, when they want it.
