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?
(via Home Media Magazine)