Netflix: Hollywood’s Favorite Charity

[Commentary] Unlike the traditional content providers before them who bungled their transition to digital by giving everything away free, Hollywood thinks it has found a darling little helper to fill its coffers with an unexpected flow of revenue. For a business renowned for relieving the unwary of their shirts, Hollywood has allowed Netflix to walk away with its wallet. Netflix’s prosperity is based on having Hollywood as a very willing and cooperative subsidy machine.

The studios and TV networks have allowed Netflix to build both an international presence and a level of recognition that they cannot match with their own product! Despite having around only 10 percent of the US population as subscribers, Netflix has, courtesy of Hollywood’s charity, the prominence that Warner Bros. and Paramount, for example, had decades ago and squandered. Hollywood — meaning the collective talent of the film and television industry — now does all the donkey work while Netflix cherry-picks what will be most profitable and successful for its business model. What iTunes has done to the music industry Netflix is doing to Hollywood. Networks are merrily facilitating the destruction of their own business model by destroying the notion of staggered viewing over a season, where the best shows and event screenings bookend lesser work to sustain the audience numbers through billions of dollars of advertising, their bread and butter. Broadcast TV and scheduling as we know it is heading for extinction.