Tag Archive for Netlix and Sony

Sony Tells Netflix: Adios, Amigo

It’s pretty amazing that it took Sony, which is the maker of the Blu Ray disc, this long to stop doing business with Netflix which is the biggest enemy of the home media market (arguably besides Coinstar )

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Finally, the studio executives might be figuring it out that handing their enemies free money is a bad corporate strategy. I expect to see much more of this type of realization among studios who are starting to figure out that the “disruptive” models of Netflix and Coinstar are really only disruptive for the studios! The fears behind “the death of brick and mortar rentailers” after the stupid debt moves of Blockbuster and Movie Gallery have led the studios to cut off their hands to spite their feet.

By working with Netflix, Coinstar, Hulu, Amazon, Apple, etc… and not the brick and mortar retail community the studios have ensured their own demise…. I will be anxious to see more developments such as these in the home entertainment market and hopefully a Blu Ray based rental market that includes mom and pop video stores and not just kiosks which provide no jobs and no profits for Movie producers.

Disclosure: I’m short NFLX call options

From Home Media Magazine:

Sony Pictures Home Entertainment quietly has pulled its movies from Netflix’s streaming queue due to contract issues with aggregator Starz Entertainment. In a post on Netflix’s blog (blog.netflix.com), Pauline Fischer, VP of content acquisition with Netflix, confirmed the situation between two “valued” content providers without elaboration. Indeed, Sony’s top-grossing films since 1984, which include Spider-Man, Spider-Man 2, Spider-Man 3, Men in Black, Ghostbusters, Hancock, The Da Vinci Code, Terminator 2: Judgment Day, Men in Black 2 and Hitch, are available on Netflix only via DVD and/or Blu-ray Disc. Starz, which distributes Sony and Disney movies, among others, to multichannel video distributors such as cable and satellite TV, sub-licensed content to Netflix streaming several years ago for $30 million annually. That agreement — now widely panned by media executives as a give-away to Netflix — expires early next year. Renewal is expected to fetch Starz a tenfold increase in license fees from Netflix. Richard Greenfield, analyst with BTIG Research in New York, said the pullback by Sony appears to be due to a clause in the original output deal as it relates to digital rights and the number of third-party (Netflix) digital streaming subscribers created. Netflix’s burgeoning subscriber growth (and stock valuation) throughout the past few years has been due to its market-leading streaming service. “We suspect Starz wants to have a sense of what its new Netflix deal looks like, before it renegotiates with Sony in terms of how much of the dollar upside goes to Sony versus [them],” Greenfield wrote in a June 17 post.