Netflix is delaying the test-launch of its still-vaporware online movie service…in the Q3 earnings call today, CEO Reed Hastings said a test launch of his company’s online movie download service is being put on the backburner because of licensing issues with studios. Not sure what it means for the company’s tie-up with Tivo (Someone tells me this was the Tivo tie-up), which again hasn’t seen any activity after the announcement a year ago.
He said in the call that even though services like Movielink and Comcast (?) have impressive technology, they’ve had little success in licensing movies for their services. He also played down the launch of Apple’s video iPod, saying it has no studio content.
“We face the same obstacles for licensing and downloading, and we’re going to hold-off on the launch of our movie download service. We’ll continue to enhance our technology and infrastructure and we’ll be ready to quickly launch when the content climate thaws and it becomes possible to deliver a compelling consumer experience.”
He goes on to pontificate: “How long will it take, and who will help us get there? Interestingly, even though you might think of Movielink, Comcast and Apple as our competitors, they are, for now, our allies. We are all one broad, non-exclusive licensing of movies, as with music today. Our shared opponent are the TV channels, who pay large sums for multi-year exclusive access to studio films. In the music context, imagine if Clear Channel or XM paid money to get five-year exclusive access to all Warner Music, and the entire Warner catalog was not available for legal downloading. That is the current movie situation which is why no has been able to license 50,000 DVD titles for downloading. This will shift over time as those exclusive licenses are renegotiated and Netflix and its allies can collectively deliver more profits to the studios than the exclusive TV deals…whether this happens in two quarter or 20 quarters is hard to say.
The consoling factor is that the bigger we get in this DVD business, the more chances of success we have when the market does become ready.”
Subscriber content
?
Subscriber content comes from Gigaom Research, bridging the gap between breaking news and long-tail research. Visit any of our reports to learn more and subscribe.
Advertisement
Advertisement
Advertisement
Comments have been disabled for this post