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Netflix a Conquering Army

18 Jul, 2014 By: Thomas K. Arnold

The impact of Netflix on how we watch movies and other filmed content is astounding. There are those who say the company’s subscription streaming service is decimating the disc sales business, while others scoff at this intimation and insist the real victim is broadcast TV.

Those who hold the latter point of view note that Netflix viewing options, at least at this point, are limited to old movies and recent duds, and that as long as the window between Netflix and Blu-ray Disc/DVD is maintained, we have nothing to worry about.

Oh, sure, there’s a definite impact from all the eyeballs watching White Chicks or “Supernatural” on Netflix instead of hot new releases on Blu-ray Disc or DVD, but the debate centers on whether those eyeballs belong to people who would, indeed, be buying new discs if Netflix wasn’t available, or if their owners are sluggish couch potatoes who’d otherwise be watching broadcast or cable television.

But there’s no question that the Netflix juggernaut keeps rolling and amassing power — with the ultimate goal, of course, of offering first-run movies and TV shows at the same exact moment they come out on disc — a move that will, of course, kill the disc business and probably a lot of other businesses alongside it, including pay-TV.

Never going to happen, you say? If the money’s right, of course it will — and if there’s one thing I’ve learned in more than 25 years of covering the home entertainment business, it’s to never, ever, say never.

As Home Media reported July 17, Netflix and The Walt Disney Co. have cut a deal in which Netflix gets exclusive pay-TV access to first-run movies in Canada beginning in 2015. A similar deal is in place here in the United States, although it’s not scheduled to start until 2016.

Netflix in Canada also gets first-run pay-TV films from Paramount, DreamWorks Animation and 20th Century Fox.

If things continue to be heading in this direction, pay-TV will crumble and fall to Netflix’s domination — and after that, there’s really only one more market left to conquer, the disc business.

Studios won’t give it up without a fight — but the more powerful Netflix becomes and the more the disc business falters, the harder it’s going to be to resist a reasonable offer. And if Netflix can somehow figure out how to make the numbers work, offering unlimited access to new-release movies and original TV shows for $9 a month, what began as a disc-by-mail rental service challenging Blockbuster and traditional rental will truly become the pre-breakup AT&T of home entertainment.

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