Netflix’s net gains nettle networks and theater owners

Netflix seems to be aggravating everyone but the 40 million people who subscribe to its service. The company that started as an innovative deliver-DVDs-by-mail service has become a major player in the television industry, scaring and angering competitors in the process.

This autumn has brought landmark moments for the folks at Netflix. The company has bought rights to reruns of the Showtime series “Dexter,” keeping exclusive rights out of the hands of its streaming rivals Amazon Prime and Hulu.

They shook up the Emmy Awards by garnering nominations for the Netflix original series, “House of Cards” – a first for an online-only production company. They have surpassed cable heavyweight HBO in number of U.S. subscribers. And they have ticked off movie theater owners by insisting that theaters should not have the exclusive right to debut new films.

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At the 2013 Film Independent Forum, Ted Sarandos, chief content officer at Netflix, said consumers should decide where they want to see a new movie. “Why not premiere movies on Netflix the same day they’re opening in theaters?” he asked.

The theater owners’ response was that such a development would be the ruin of their business. Netflix already killed off the DVD rental trade, they said, and they do not want to be the next to go the way of blacksmiths and buggy whip manufacturers.

HBO and Fox executives have also criticized Netflix, challenging the company to do as everyone else in the business does and release ratings numbers for their programs. If the Netflix original series “Orange Is the New Black” truly is as popular as Netflix claims, the cable rivals ask, why not prove it with the numbers?

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To that, Sarandos has sharp rejoinders. For one thing, he says, slavish attention to overnight ratings undercuts creativity. (He is a guy who buys entire seasons of shows without even seeing a pilot.)

For another, Netflix is not seeking advertisers, the people who are most obsessed with ratings. And, finally, Netflix does not need a ratings service to provide them with solid numbers; they already know exactly when each subscriber clicks a mouse or track pad to call up another episode of a show.

Netflix is playing by its own rules and, in the process, may be changing the game for everyone else.

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