Ever show up for a masquerade party "dressed like Lady Gaga with a bottle in your hand looking like a psychiatric patient in a bustier" only to discover that you're a day late and a
dollop of good sense short? If you have, you've just experienced an "Aw, (expletive)!" moment, writes
Knoxville News Sentinel entertainment
writer Wayne Bledsoe, and you know exactly how cable television industry executives and DVD manufacturers have felt as they watch Netflix's streaming strategy take off.
"If you could
simply access seasons of your favorite TV shows or hit movies any time you wanted, why would you really need to spend $20 to $50 to own the DVDs and let them take up space in your house or even wait
for a rental DVD to be delivered?" Bledsoe asks his readers, who have presumably come to that very same conclusion given the 20% drop in DVD sales for the first quarter, according to Digital Entertainment Group figures.
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The Wall Street Journal's Jessica E. Vascellaro, Lauren A. E.
Schuker and Sam Schechner report, however, that several of the big media chiefs have moved on from their positions of way back when (like a few months ago) and now look at Netflix as a partner to be
embraced rather than a party pooper.
Take Time Warner CEO Jeffrey L. Bewkes, for example, who disparagingly likened the former mailer of DVDs in red envelopes to a third-rate military force
in an interview with the New York Times' Tim Arango.
"It's a little bit like, is the Albanian army going to take over the
world?" he said way back in December 2010. "I don't think so." On Wednesday, however, he called Netflix "a welcome addition" to the video market and indicated that he was
growing fond of it.
And CBS CEO Les Moonves recently said, "Gee, it's great to be in business with them and they are terrific," after expressing some puzzlement about exactly
what the company was last September. Then there's News Corp. president and COO Chase Carey, who last week revealed that Netflix "has actually provided some truly incremental value" for
old movies and TV shows from the vaults at Twentieth Century Fox.
"The shift illustrates media companies' efforts to adapt as business pressures change," the Journal
writers tell us. "As consumer behavior changes, the pressure to find new sources of revenue and ally with new distribution partners is more urgent. Many feel there aren't a lot of options for
resisting the change."
It also doesn't hurt that Netflix, which made some bargain-basement deals a few years ago, has shown that it's not a congenital tightwad. It's paying
upwards of $75 million to Lionsgate for the exclusive streaming rights to "Mad Men," for example.
Jeffrey Goldfarb and Reynolds Holding have a different take on the way that company
defies and converts skeptics in yesterday's New York Times. "Part of the success may stem from the uncommon way Netflix rewards its people,"
they write.
Employees can decide how much of their salary to take in cash and how much in options, for example. And the options are granted monthly instead of annually, as is normal practice,
which is beneficial to employees because the share price has tended to be volatile. Instead of worrying about underwater options, the trusty workers can focus on "how to keep Netflix a step ahead
of the competition," Goldfarb and Holding write.
Matthew Garrahan, Adam Thomson and Joe Leahy of Financial Times report, meanwhile, that
Netflix will soon announce deals with three of Latin America's largest broadcasters -- Grupo Televisa and TV Azteca of Mexico, and Globo of Brazil -- and will begin to stream programming online in
Argentina, Brazil, Chile and Mexico.
The FT points out that Internet usage is exploding in Latin America and the Caribbean and Google sales increased in various countries in the
region by between 50% and 100% last year. Without specifically commenting on the plans, Netflix says, "Our long-term goal is to have a worldwide service at some point."
And to think
we knew them when.