As the white paper has received great reviews by those in the entertainment industry and experts in the field (I quote three such endorsements on its cover page) and nowhere in the paper does it advocate piracy but simply presents it as a fact of reality in today’s environment which the entertainment field has to deal with in a mature way, your comments say more about you than me or the paper.

As for your white paper it’s nothing more than an anti-establishment rant where you propose that everyone should pirate because they are entitled to the content.

I’m done baiting the troll.

You need to read up how TV shows are produced. ABC, CBS, Fox, and NBC only self-produce a very limited scope of their programming (namely news) and contract out the rest of their programming to production companies. Same is the case with all cable TV channels, except for the new channels (FNC, MSNBC, CNN, etc.). These non-network production companies don’t even get paid the full cost of producing their shows since the networks don’t own the syndication rights to the shows and the production companies do. If you read up on the industry, you’ll commonly come across references to 100 as the magical number for TV shows. This has NOTHING to do with their network appearances and EVERYTHING to do with them becoming a syndicated property. 100 is viewed as the minimum number of episodes a TV show needs to thrive in syndication. It was almost the reason why the original Star Trek wasn’t syndicated since it only had 79 episodes. Fortunately for Star Trek fans, Paramount took the gamble and syndicated Star Trek. But most TV shows are not syndicated unless they hit the magical number of 100 … which means they have been on the air for at least four years (which is very likely why poorly-rated “Star Trek: Enterprise” got a fourth year). It is only in syndication that the production companies expect to turn a profit on their TV shows.

However, who Netflix is negotiating with isn’t the production companies but the networks which own just the right rights to force Netflix to deal with them. You see the networks (broadcast or cable) own not only the first airing of a TV show episode but also at least the second airing (and usually at least a few more past that) so they can re-run the episode before it gets syndicated. The networks view this as a way to get back their money from what they paid the production companies for the networks typically don’t turn a profit on their TV shows until they re-run them. This is why news is viewed as a sinkhole by the networks since news shows have no re-run potential. News magazine shows to a very limited extent (mainly during the summer) but not your morning or evening news shows.

But because of these re-run rights that the networks do hold, Netflix has to deal with them or they have to wait until the network have done all their re-runs of the episode and the show is put into syndication. But Netflix (and their like) don’t want to wait that long since the viewers don’t want to wait that long. The fresher the episode, the more it is requested.

As for Netflix producing its own content, others in the industry are expecting it is only a matter of time before they do.
http://www.thewrap.com/movies/blog-post/prediction-netflix-will-soon-produce-original-content-22097

As for my condoning of piracy, I’m not. I’m just realistic about it. In 2003, I did a white paper on it. Here’s a link to it:
http://miketurco.com/library/p2prev.pdf

As for my comment about you directly, it still holds. I’m amazed you don’t understand how a few dollars means a lot to poor people and I don’t believe you are a poor college student. My guess is mommy and daddy are footing your college bills.

@Scott Jensen,
I don’t know if you are deranged or a troll. First of all most studios are the content producers and they hold the copyrights, Netflix must negotiate license agreements with the studios. It’s foolish to think that Netflix would produce their own content.

Secondly you are condoning piracy which is not the topic here, I was a poor college student and I never pirated anything(music or movies).

Frankly, this could be good news for the smaller content producers who will likely increase their market share. Also, much of the new content coming out of Hollywood is unappealing to me, and I’d guess to others as well.

Therefore, if I was a entertainment industry analyst, then I’d be concerned about Mr. Bewkes point of view — he sounds out of touch with the fragmented consumer marketplace (a “mass-market” for video in 2011 may be a figment of an uninformed Hollywood executive’s imagination). As a Time Warner investor, I’d be even more concerned about this myopic commentary.

When it comes to Time Warner I don’t understand why no one in their earnings calls has asked them if spinning off HBO into a separate company wouldn’t provide more value (i.e. money) to shareholders!

I for one would be open to paying my Netflix fee plus the $13 to $15 per month to subscribe to a premium channel like HBO through Netflix. What’s the business rational (other than conflicts of interest in Time Warner) from providing me this choice? Fact is that there are artificial barriers to becoming an HBO client!

No, Netflix doesn’t. It doesn’t deal directly with content producers but moneybags/middlemen. If it were to, that would be better but it doesn’t. It needs to.

That model doesn’t work so well. Let them do what they do best and let the value chain shrink/expand accordingly. By getting into the production business, which they have in a limited way, you are diverting resources that would be better spent making the service better.

The production business is a different beast than distribution. Their motivations are different and they don’t play well in the same sandbox.

Netflix is a democratizer. They make it easier for producers to get their content seen.