There are rumors making the rounds that movies studios are starting to feel threatened by netflix instant streaming service. Nikki Finke blogged this:
The Wall Street Journal’s astute Martin Peers warns tonight that Netflix ”stock-price bubble may be close to bursting” because Hollywood studios and networks don’t like the competition. 
The share price has doubled since November, “taking it to a rich valuation of 26 times estimated 2009 earnings — a loftier multiple than either Google or Apple.” But the DVD mail order business wasn’t what juiced investors: it was Netflix’s streaming service. And reports that rival Blockbuster could be facing bankruptcy didn’t hurt. But now “Hollywood studios appear to be waking up to the threat posed by Netflix’s instant-watch service, which the company says is being used by millions of its subscribers,” Peers writes. “That almost guarantees that studios will look to renegotiate Netflix’s content-supply deals on tougher terms. At the same time, some of the studios [like Disney] are pondering their own online movie- or TV-subscription services.” The WSJ also notes competition coming from Amazon’s IMDB, which is expanding a free ad-supported streaming service. Concludes Peers: “Netflix fans take note: A correction is looming.”
As yogi berra said, this looks like de javou all over again. For some reason the story seems to be repeating itself from music and itunes to labels and youtube and now movie studios with netflix. One would think that there would be lessons learned from before but apparently not. It is fine to negotiate a fair contract if studies think the current one is not a win win situation. But it would be mistake to strong arm netflix thinking that they have no leverage or power. Netflix has become a major force in movie distribution and the studios need them as much as netflix needs them.