If Netflix’s efforts to acquire content for its Web streaming service was a baseball game, then it would be in the 5th inning for securing TV shows and in the 8th for movies — although there’s a chance to start a new match there around 2013 — CFO David Wells told an investor group on Wednesday. Hollywood studios are less fearful of Netflix than they were in 2009 and 2010. “Wall Street probably had a part in amping the paranoia of doing deals,” Wells told the Bank of America Merrill Lynch Technology Conference. But now studios are willing to experiment, and “it means people are coming to us with deals.” Opportunities may increase in a few years as studio commitments to premium channels such as HBO and Starz expire. For example, he says that Netflix would consider doing a deal directly with Disney or Sony in mid-2015 if they’re unhappy with the terms that Starz offers them to stream their films. Wells says that studios “would love for us to have a competitor” to bid up prices for movies and TV shows — and Netflix considers Amazon, Google, and Apple likely candidates to play that role. “They’re well capitalized and consumer-centric,” he says. Years from now he says that cable and satellite companies could join the fray by introducing their own Internet streaming services. “It will make for good sport down the road on the content side,” Wells says. But rivals must be ready to spend hundreds of millions of dollars just to match the movie and TV deals that Netflix has cut since September. Although he wouldn’t discuss specific agreements in detail, Wells says that many studios insist that Netflix pay for old content that it doesn’t want in order to secure streaming rights for more attractive movies and TV shows. Still, Netflix won’t keep spending if it can’t meet its target to generate a 14% operating profit margin for the U.S. business. Netflix probably won’t add advertising, games, or a VOD service to make the streaming service more profitable. “Expect from us continued focus,” Wells says.
Netflix Exec Says Wall Street Fanned Hollywood 'Paranoia', But Now Studios 'Are Coming To Us'
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