Is Netflix a TV Star?
After weeks of thinking outside the box, Netflix (NAS: NFLX) may not be able to escape the boob tube.
Speaking at the entertainment industry's Mipcom conference, Netflix content chief Ted Sarandos conceded that 50% to 60% of the service's streams that his company is serving up are for television shows.
"That can be misperceived as Netflix giving up on movies, which it's not," Sarandos explained, as retold by PaidContent.org. "It's just consumers saying what they want."
Well, cynics may argue otherwise. It's not the consumers calling the shots here. Netflix doesn't give subscribers too many new theatrical releases in streaming form to choose from. Revisiting old episodes of Mad Men or Lost is just more tantalizing than watching You Again -- again.
Would television shows still account for at least half of Netflix's streaming activity if its entire DVD library were available via Internet? I doubt it. Why do you think DISH Network's (NAS: DISH) Blockbuster and Coinstar's (NAS: CSTR) Redbox primarily stock new theatrical releases on DVDs? Now that is what consumers want.
Unfortunately, couch potatoes are unlikely to ever get that chance. Major studios know they can't give up their latest releases to be part of a $7.99 a month buffet line. The sticking point with Starz (NAS: LSTZA) , reportedly, was that it wanted to be part of a higher-priced package. Netflix wasn't ready to commit to tiered pricing, though who knows how that would have played out if Netflix would have known the brutal September that was waiting in the wings.
Hopefully Netflix will still find a way to beef up its theatrical content. It is a differentiator. The last thing that it needs to become is another television-centric Hulu Plus.
Netflix shouldn't be proud that its streaming service is being used primarily by folks catching up on earlier seasons of television shows. It's not a sustainable model. It's also much less of a compliment, and more of an insult of its digital movie selection.
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At the time this article was published Motley Fool newsletter services have recommended buying shares of Netflix and Coinstar. Motley Fool newsletter services have recommended creating a bear put spread position in Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.Longtime Fool contributor Rick Munarriz has been a Netflix subscriber and shareholder since 2002. He does not own shares in any of the other stocks in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
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