3. Netflix CEO: All TV will be Internet in 10-20 yrs

Netflix CEO: All TV will be Internet in 10-20 yrs

People subscribe to Netflix due to its vast catalog of older content (at such a cheap price that the company makes no profit and has negative cash flows with respect to their streaming business). If licensing this old content kills the value of the content producers' new content, it is only logical that they will require additional money from Netflix or stop licensing to Netflix their old content altogether.

Eventually, I foresee Netflix being either (1) a channel as you describe with their original content and a much smaller catalog of licensed content, or (2) a one stop shop similar to how they are now with a much higher subscriber fees similar (or at least a tiered approach with higher tiers being similar to cable packages now).

Right now, Netflix is priced where it is not surprising that they grew subscribers so fast. There is enough content for cord cutters to ditch cable and low enough price for existing cable subscribers to use as an add on. The short sighted content owners apparently didn't think the cord cutters were much of a problem so they viewed the bonus revenue from Netflix as a great thing. That is starting to bite them in the butt as evidenced by TWC and the problems at ESPN.

Netflix has made its mark as a distributor of content. In fact, they have disrupted the content distribution business in a big way. The shift to produce much more of their own content is very risky because there is an inherent conflict of interest in being both a distributor and a creator of content. If you are a distributor of content, then you want to distribute everyone's content. If you are a creator of content, then you want everyone (all distributors) to distribute your content. Attempting to do both is ultimately a losing proposition. The evidence suggests that Netflix is already alienating content producers which threatens their primary business - content distribution. It has opened up the door for others to finish what they have started and people with extraordinary capabilities, resources, and reach are stepping up to do so.

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