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Old July 14 2011, 07:55 PM   #121
SPCTRE
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Re: Netflix shoots itself in the foot... aka no more free streaming

gh4chiefs wrote: View Post
As this story on CNNMoney explains and even Netflix's own CEO Reed Hastings has revealed, Netflix will have to shell out millions and millions of dollars (if not billions) just to keep the content it currently offers in its Watch Instantly library. During June's D9 conference in California, Hastings readily admitted that it was going to cost money to deliver the kind of streaming experience customers demand: "Part of our goal is to make subscribers happy and part is to make our content partners really happy and part of that is writing really big checks," he said.

CNN reports that many of the contracts Netflix signed with the studios had a user cap. As Netflix blows by those caps, the contracts implode and Netflix loses access to the content. Paying a lot more money is one way to get the movie and TV shows back, but the new deals Netflix signs will be far more expensive than those the partners drafted three or four years ago.
http://www.pcmag.com/article2/0,2817,2388343,00.asp
There you go, or as Michael Pachter so succinctly put it on Twitter:
My thesis on Netflix price change: content owners squeezing them based on subscribers, they bifurcate to isolate streaming subs & lower cost
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