by Mojave Bob » Fri Jul 15, 2011 8:49 am
As I understand it, NetFlix licenses the DVDs and the streaming parts from the movie studios under separate contracts. Most of the streaming contracts were negotiated in 2008, for 4 years, and they contain a viewership cap. The studios didn't expect streaming to really be a big thing, so NetFlix got the licensing cheaply ($10-14 million per studio per year).
Now that streaming is the big thing, and now that the contracts are expiring, the studios want a bigger piece of the action, and renewals will probably cost NetFlix $100 million-plus per studio per year. This dramatically changes the business model for NetFlix.
Additionally, NetFlix is blowing the viewership caps for some studios, which voids the contract (this is why Sony Pictures movies disappeared from NetFlix recently).