It doesn't matter who you are, you're not getting a deal.
The notion that the cost of content is merely a rounding error for Microsoft doesn't justify the Netflix proposition. Great. It can afford to buy content and absorb losses and come out much healthier at day's end than Netflix. This justifies taking on billions in debt just for the opportunity to assume content deals you could get on your own?
And, don't forget, the more subscribers a service has, the more content costs, particularly premium content, if the content owner is even willing to license it in the first place. We can't ignore the Netflix experience with
I outlined on Monday. It's instructive, but often overlooked.
Content owners will not sell premium content to third parties if they think these outlets dilute the premium nature of that content. Sony didn't like giving away its movies to a Netflix with a growing subscriber base, but a static monthly subscription cost.That's why, by and large, big media companies only license a small fraction of their content, in most cases, to Netflix, Amazon and others. If you want premium stuff you not only have to pay for it, you must be willing to offer it a la carte at a premium price, something Netflix appears unwilling to do.
There's really no reason why companies such as Time Warner cannot or will not create their own platforms to deliver premium content on their terms. Consider HBO GO the most successful TV Everywhere testing ground. And now Time Warner tosses this latest venture into the mix. This is just another Jeff Bewkes' punkslap of Reed Hastings. At any second, Time Warner, News Corp, Comcast, Disney and CBS can change the game by streaming all or most of its content via its own platforms. Such a move puts Netflix out of business. These big media conglomerates allow Netflix to exist. They can squash it on a whim, leaving Netflix with its original programming powerhouse pipe dream as its only shot at survival. "A" players such as Bewkes can leave Hastings and Netflix out to dry. I'm not sure why Microsoft wants to put itself in that sort of position.