If we are engaged in a TV partnership, do you need me more than I need you? Is that what’s happening for Netflix?
After all of last year's turbulence concerning price changes, name changes, and apologies, Netflix continues to offer content creators a promising after-market. In some ways this resembles how the cable industry started. In the ‘80s, when the cable business was growing, big TV/media companies didn't give the business much notice. Reruns of their TV shows were the domain of TV stations. Then as cable networks started getting bigger and more powerful, movie/television studios began to rely on them more for their after-first-run market program revenue.
Now Netflix is firmly in the space -- which is not to say that Amazon, Blockbuster, YouTube, Apple, Hulu Plus, or other couldn't obtain similar heights. But with some 22 million monthly subscribers, Netflix has a pretty good head start -- despite some consumer complaints about the service that started last year with its executives’ wrong-headed decision to alter its service and brand name.
CBS made a big deal with Netflix that was a key piece of its overall business plan for the success of the CW, a network it half-owns with Warner Bros and which on its own would continue to lose money in the short term. One analyst speculates that Netflix has enough cash flow on hand that it could lose some 10 million consumers -- about half its current total -- and still be a viable business with positive cash flow.
Other TV partnerships -- TV and cable networks and their cable, satellite and telco video distribution partners may have a less positive prognosis. I've lost count of how many blackouts and strained negotiations there have been. But these still seem to be "must-have" business relationships.
Other "must haves": TV stations and their restless TV networks -- who are being tempted by the likes of Netflix, Hulu Plus and others. Then there are the TV networks and their advertisers -- looking for the right formula to keep marketers coming back as fractionalization hits their main platform of traditional television.
Partnerships might be the wrong word these days; maybe we need a new word to define these changing relationships, as companies become adversaries as well as partners.