Netflix's growth elicits fear in Hollywood

Hollywood long has had a love-hate relationship with Netflix.

The honeymoon began when Netflix was just a scrappy vendor that would buy DVDs of movie and TV shows and send them in red envelopes to customers across the country (which it still does). The business generated revenue for the studios through increased DVD sales. Then, in 2007, Netflix added a streaming option and provided studios with even more money for the rights to their old movies and TV reruns. But tensions have escalated as Netflix has become the go-to destination for millions of viewers who are attracted by its low cost — $9.99 a month — ease of use and commercial-free programming.

Netflix has moved from its foundation as a video rental business to become an entertainment juggernaut generating award-winning content for both its digital streaming service and theatrical releases. Many of Hollywood's most talented writers and producers take their proposals to Netflix first. It's also a Wall Street favorite valued at nearly $45 billion, giving Netflix financial firepower to go with its impressive subscriber base.