TV Industry Plans to Neutralize Netflix

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PaidContent.org, an economics website, has a very interesting article detailing Turner Broadcasting's plans for dealing with Netflix. This information came from Turner Broadcasting chairman and CEO Phil Kent during a Citigroup Global Entertainment, Media, and Telecommunications Conference.

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Kent referred to Netflix as the "elephant in the room" and "a fly in the ointment." He said that the television industry is becoming more and more aware of the effects of Subscription Video-on-Demand (SVOD) services, specifically Netflix. Kent said, "We tell our suppliers, the studios we buy from: This is going to have a significant impact on what we will be willing to pay for programming or even bid at all."

So it sounds like the broadcasting companies are willing to play hardball with the studios. However, the studios are playing even harder ball with Netflix, doing whatever they can to block Netflix from getting access to the best shows. While in negotiations with the broadcast companies, the studios have frozen the SVOD rights to the television shows. And it unclear when these rights will become unfrozen.

In fact, Netflix is allowed only the crumbs. For example, Netflix was able to get the rights to the show Nip/Tuck because it drew little interest from broadcast syndication.

It's an interesting and powerful measure it institute to be sure, but how effective will this blockage be?


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