Remember last month when Netflix announced it was separating its mail and streaming operations? Well, they’ve reversed course.
Netflix is at an interesting point in its evolution. Three years ago, when it negotiated a streaming agreement with Starz, established players like Liberty Media didn’t perceive streaming as a competitor. Now, aware of the threat to the status quo, they’re pulling the plug in an effort to protect it. Qwikster was obviously an ill-thought-out reaction to the reaction.
As Tim Carmody wrote last month:
The cable and content companies have been fighting each other for a lot longer than Netflix has, and have the battle scars to prove it. They were never going to melt away, or walk away from a new pile of money on the table. This fight, not permanent peaceful growth, was always inevitable . . .
Netflix’s advantage, like cable’s, is its simplicity. You pay a little bit of money every month in exchange for a wealth of entertainment. But what the company becomes now, and what its competitors become in response, will determine the future of how we watch video for years to come.
We’ve seen this show before. Ask the wireline telephone carriers, the newspaper industry, or the record stores in the mall how it ends.