The Cost Of Permission Culture: Or Why Netflix Streaming Library Sucks Compared To Its DVD Library

[KoKo]

from the first-sale-is-important dept--by Parker Higgens

Why can't movie-streaming sites deliver the selection of movies that customers obviously want? This was the question posed by a recent New York Times column, comparing undersupplied services like Netflix with unauthorized platforms like Popcorn Time. The answer, the Times explains, is windowing—the industry practice of selling exclusivity periods to certain markets and platforms, with the result of staggered launches.

But the Times fails to ask a more fundamental question: why do streaming sites have to listen to Hollywood's windowing demands in the first place? After all, while it's clear why the studios like windowing—they can sell the same rights over and over once the promised exclusivity periods expire—it doesn't seem like a very good deal for users. Those users get access to a smaller selection, higher prices, and fewer choices between platforms and services. It should be astonishing that a company that once had to maintain and transport a staggering inventory of fragile plastic discs is able to offer less when its marginal cost dropped to near zero.

The problem is that, unlike earlier movie-rental options, streaming rights fall fundamentally within a permission culture. Netflix is a great illustration of what's gone wrong here. It's gone from having a nearly unrivaled catalog of films available to rent to being the butt of Onion jokes. What happened: It shifted from a system where nobody had a veto power over its operations, to one where it had to get permission and make deals with Hollywood. Sometimes it's difficult to find the concrete costs of living in a permission culture, but the decline of Netflix's selection is an important cautionary tale.

It's especially clear when you look at how Netflix upended the movie rental market in the first place. In one way, it suffered from a major competitive disadvantage: competitors like Blockbuster had locations near people's houses. As long as those stores had the movie you wanted, you could be watching within hours—not days—of deciding on a title.

But Netflix was able to experiment with different price points and subscription models and, crucially, it could try those without first convincing any incumbents. Both Blockbuster and Netflix's DVD-by-mail service relied on the first sale doctrine, meaning they can buy physical copies of movies, and then resell or rent at any price they like. No royalties, no licenses, no contracts—with physical media, once a rental company has bought the copy, the copyright holder is basically out of the picture.

More--INTERESTING READ AT:

http://www.techdirt.com/articles/20140408/16254926844/cost-permission-culture-why-netflix-streaming-library-sucks-compared-to-its-dvd-library.shtml#comments

[cyberswede]

1. I suppose it's just a matter of time...

before the streaming side has more/better titles.

And they've had some success with Netfilx-produced content, which is nice.