Is Netflix Dreaming?


Will NetFlix's groundbreaking new deal with DreamWorks be enough to wake Netflix up from its recent customer experience nightmare?

While some analysts are praising Netflix for aggressively outbidding HBO for the rights to DreamWorks Animation movies, others are already saying that Netflix executives must be dreaming if they think the new deal is going to provide significant damage control after the company alienated its customer base so spectacularly. For one thing, the deal only takes effect in 2013, and customers who are still upset about the recent price hikes probably won’t get too excited about change that is more than a year away. Greg Sandoval from Cnet News offers a cynical (but probably accurate) viewpoint that “it’s going to take much more than a few cartoons to satisfy streaming customers.” 

Regardless as to whether Neflix succeeds in recapturing customer goodwill, a historical first has been achieved: this is the first time a major Hollywood content provider has chosen a streaming service over a traditional Pay TV player.

Jeffrey Katzenberg, DreamWorks’ chief executive, believes that in the near future consumers will not distinguish between the two. “We are really starting to see a long-term road map of where the industry is headed,” Mr. Katzenberg told the NYTimes. “This is a game-changing deal.”

This deal may or may not turn out to be good for Netflix or Dreamworks, but it’s good news for us, the consumers.  As we continue to move toward flexible arrangements that allow us to pick and choose our desired content, this deal represents another small step in the TV evolution. And the service providers who wish to thrive in this new reality will be the ones who offer greater choice to their customers (even to customers who don’t want to “cut the cord”), as well as seamless mobility.

 Consumers want to view their content across all their devices with the ability to start a show on one device, (such as a TV), and finish on another (such as a tablet or mobile phone). While these needs for the most part aren’t yet being met, today’s consumer dreams will soon become a reality.


One Comment

  1. Arye Zacks
    Posted September 27, 2011 at 3:59 am | Permalink

    I think we are nearing a point where the TV networks are irrelevent. There was a time when TV Networks and production houses needed each other. The networks needed a forum, while the production houses needed a platform.

    However, as this move by Dreamworks clearly shows, production houses like Dreamworks are finding that they can get their product to consumers without going through the networks. How long is it before production houses like MiddKid Productions figure out how to make money taking The Chicago Code directly to consumers, cutting FOX out of the loop?

    MLB and NFL already have their own networks. How long will it be before they decide to cut FOX, CBS, NBC and ESPN out of the loop, and generate all that advertising revenue for themselves. Both already offer Pay Per View online streaming experiences, which have advantages over broadcast TV. Taking it to the next level, both companies can cut out their network partners from the mix, sell directly to consumers online, and generate all that ad revenue into their own coffers.

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