Netflix is just too powerful for cable companies to snub - as much as they want to
Netflix/House of Cards
Netflix/House of Cards
View all Offers
James Murdoch, who heads 21st Century Fox, said politely that his thinking on the subject was "evolving" - and not in Netflix's favor.
But Netflix might just be too big of a powerhouse in the market for cable companies to spite, according to an analyst note from Morgan Stanley on Monday.
The analysts write that the Hollywood "talent" involved in hit shows - like actors or writers - expect their studio partners to maximize the earnings on each show. They don't care about Netflix hurting other parts of the studio's business. That's not their problem. They want as much money as possible, and Netflix is throwing it around.
Morgan Stanley claims that Netflix has been "broadly positive" for the ecosystem as a whole, especially compared to YouTube and Facebook, two emerging platforms whose ability to deliver value to studios is much less certain. This means it's hard for a cable company to sell a move to cut off Netflix as beneficial to anyone but itself.
Morgan Stanley sees this truth reflected in Netflix's continued ability to acquire high-performing content like ABC's "How to Get Away with Murder" CBS's "Jane the Virgin." And the analysts don't see the loss of "Mr. Robot" to Amazon Prime's video service as part of a trend toward smaller streaming players like Amazon or Hulu.
Netflix is the standard.
Beyond that, Netflix is already starting to extricate itself from a reliance on acquired content from "vertically integrated" studios that have stakes in the future of cable television. Morgan Stanley estimates that these studios represent about 30% of Netflix's content spending, and only 15% if you take out big deals with Disney and CBS.
In short, the analysts aren't worried about Netflix's ability to access content. For one, Netflix is too powerful for the studios to snub, and licensed content from studios is getting less and less important to Netflix.
- WhatsApp won’t work on these phones from November 1: Check the full list
- Shiba Inu hits another all-time-high — now more valuable than Adani Enterprises, Tata Steel and Tech Mahindra
- Shiba Inu is not only bigger than Dogecoin — it’s now bigger than XRP, Polkadot and USD Coin as the seventh-biggest player in the market
- Best budget external hard disk drives under ₹4,000 in India
- IRCTC will lose a chunk of its revenue to the Indian government starting next month
- EaseMyTrip makes its first acquisition in 13 years to strengthen its hotel offerings
- Portugal''s political fate uncertain after govt budget defeat
- Battlegrounds Mobile India gets Dune-themed rewards in new crossover