A major shift is taking place. The interwebs are now important enough for major content providers to start throwing their weight around online. Sure, they’ve been doing it to some extent over the last several years – networks keeping content off Hulu, broadcasters blocking video scrapers like RedLasso – but the studios are upping their game. The latest evidence is a report from Reuters that “senior executives at three of the big six television and movie studios” are looking to renegotiate their deals with Netflix. You know those 28-day DVD release windows before Netflix gets access to certain movies? The studios are looking at extending them further. And the money Netflix pays for digital rights to studio content? Increases are likely on the way. (Of course Netflix may be very willing to pay. There’s one report out that the streaming company would pay up to $100K per episode if it could get its hands on current TV line-ups.)
None of this is surprising. Just look at the retransmission wars taking place between TV networks and cable providers. As Netflix moves closer to that latter category, the company is going to start getting similar treatment. It’s just a distribution channel after all. And now that it’s a highly profitable one, the content companies are going to shorten their leashes.
There are other recent examples of networks putting pressure on digital distribution too. The limitations placed on the likes of Google TV and Boxee Box count as one example, but I also listened in at an industry event yesterday where it became clear that networks want to increase the ad loads for content online. Will Richmond of VideoNuze hosted the event with execs from MTV Networks, Comcast, and elsewhere, and one of the discussions centered on how much advertising consumers will tolerate online. The prevailing view seems to be that there’s still a lot of room for ad growth.
Don’t get me wrong – I do believe content producers and providers have a right to get paid for their work, and high-value content isn’t cheap to make. As a consumer, though, I can only sigh with resignation as I watch the online distribution channel evolve along the lines of traditional television, and hope that greed doesn’t push the pendulum too far.