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Addressing a group of investors in New York today, Warner CEO Jeff Bewkes had few nice things to say about Netflix and other streaming providers, calling them “experimental animals” with poor business models that undervalue television syndication and disc sales.

Discussing Netflix’s $7.99 streaming-only service, Bewkes said:

“It doesn’t make sense for our networks to license shows to a subscription service that isn’t paying close to the value of those programs . . .  Simply put, large aggregation and low price is not a particularly useful thing for consumers or content creation.”

In Bewkes’ mind, Netflix and other streamers serve a role as a “utility” service for lesser content that wouldn’t be sold through more lucrative channels such as VOD, cable and satellite. According to Bewkes:

“Basically [Netflix streaming] should be things that don’t have further monetization in a window on a pay-TV network, basic cable network,”

Somewhat ominously for Netflix and its cohorts, Bewkes implied that studios will begin charging higher rates for content as alternative services such as streaming grow in popularity. Said Bewkes:

“Netflix will have to buy all the rights [for all windows] — not a sliver . . . What everyone needs to stay clear about is, what is the economic role for service that tries to have a lot of stuff on a subscription basis for $8 to $10 bucks a month versus an entire TV dial [of content]?”

Old-school thinking, Insiders, or a bit of a wake-up call for Netflix, which is already spending more and more money to obtain streaming content? What do you make of Bewkes’ assessment of Netflix and other streaming providers?
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(via Home Media Magazine)

11 Responses to “Warner CEO: Netflix Streaming an ‘Experimental Animal’”

  1. Visitor [Join Now]
    Jamie [visitor]

    Low price is not a particularly useful thing for consumers.

    Talk about a let them eat cake moment.

  2. Member [Join Now]

    “or content creation” – that’s his real point. they’re not making back production costs. I’m surprised he remembered customers exist.
    A prime example of not updating your business model and ideas. I don’t know that Netflix is necessarily the future model of all content, but this guy is clearly missing the point.

  3. Member [Join Now]

    Just another old fart caught in the 20th century. Sorry dude, but NF streaming is here to stay, like it or not. Also, low price isn’t useful to consumers? Man, what is this idiot smoking?

    • Visitor [Join Now]
      Anton [visitor]

      The idiot it doing what he is paid to do, protect his company’s financial state. Low price isn’t useful to the consumers means the difference between watching “The dog who saved Christmas vacation / the Electric Company: Hey you guys!” or watching “Despicable Me / Inception”.
      Netflix is on it’s way to becoming another Dishnetwork or DirectTV with the internet replacing the dish part. Expect to pay similiar prices for similiar content and service.

      • Visitor [Join Now]
        Brandad [visitor]

        You said it, we will end up still paying the $60 a month for content and the internet replacing the dish will be another $50 a month to the IPS. That will go up if our ISP’s start charging buy bandwidth usage as I have been reading about.

  4. Member [Join Now]

    *rolls eyes at CEO*

  5. Visitor [Join Now]
    Lowpricelover [visitor]

    What he really wanted to say: $7.99 for unlimited streaming!!! You’ve got to be kidding me! That wouldn’t even pay for ONE of our made up, I mean service fees.

  6. Member [Join Now]

    Bewkes is a fool. In ten years they will wish they had gotten in with netflix just as Blockbuster does now. Streaming content is the way of the future and the dinosaur networks will soon find themselves going the direction of the radio, background noise.

  7. Visitor [Join Now]
    John [visitor]

    If Netflix’s model is so flawed at $8.00/month to stream movies, what the heck has been wrong with the HBO, Showtime, Starz model for so many decades? Last time I check these channels charge around $10 per month to broadcast the same movies over and over and over…

    The reason the content producers don’t like the future is because it will likely lead to them being paid only when someone actually watches their product. Today, channel’s buy the right to broadcast from them and they get paid whether someone watches or not.

    Streaming is the future. A monthly price for access or ala carte via some portal (Netflix, Amazon, Roku, Whatever) is the future. Ala carte payment from the portal to the content providers based on actual customers viewing selecting and viewing content is the future.

    I guess someone will always want to own a copy of a movie or a tv show… But frankly I have never understood the concept. I watch something once and rarely go back to watch it again. Why would I want to waste $20 – $30 on a disk that will just collect dust and degrade. Is my behaviour unusual?