“A media analyst at Nomura, called [Netflix-Starz...

A media analyst at Nomura, called [Netflix-Starz deal] “probably one of the dumbest deals ever. Starz gave up valuable content for tens of millions of dollars

From The NY Times’s “Time Warner Views Netflix as a Fading Star”. I can’t help but wonder which junior bd guy Ted Sarandos (the chief content officer for Netflix who negotiates all the deals with Hollywood) negotiated with a Starz? (via siguy)

At least Starz took a chance. When this deal was struck (late 2008), Netflix Instant was nascent (the number of customers interested in device-agnostic streaming actually caught Netflix by surprise), Hulu was brand new, and no one really believed in an online streaming business model. Three years later it’s clear that the world as moving in that direction, and among the major movie content owners, only Starz has a clear understanding of the demand structure around its online content. Rather than sitting around saying “no, you can’t have our inventory until you promise to give us everything,” Starz said “no one knows what this will be worth, but people clearly want it, so it’s probably gonna be worth something. let’s see what we can learn and make a little coin in the process.”

There’s nothing dumb about trying something new in an exciting area, but there’s something very dumb about denigrating such efforts in hindsight. Let’s be clear, the internet has commoditized the distribution of video content. The legacy model of movie studios depended on controlled distribution of a scarce good throughout a defined lifecycle, which customers supported because that distribution chain provided the best consumption experience available. But theater —> rental no longer provides the best consumption experience in a world of large screen high definition televisions and high speed internet. It’s a new world, but only Starz had the wherewithal to go out and map the new terrain. For that they deserve credit, not scorn. What looks obvious now (that streaming is the future) wasn’t at all obvious then.

siguy