Mark Cuban thinks that Netflix’s streaming success is unsustainable
Let me start by saying I am a HUGE Mark Cuban fan so this article caught my eye a couple of weeks ago.
I just remembered to show it to you guys…
He basically has been right on a few BIG things and feels he is right here again about the long term non-viability of Netflix’s business model.
Remember..Mark has been right before when everyone thought he was crazy..
“Netflix has been brilliant at monetizing previously unmonetizable content,” Cuban said this week. The founder of high-def cable station HDNet and owner of pro basketball’s Dallas Mavericks, Cuban made the statements as part of a blogging debate he’s engaged in with Newteevee reporter Janko Roettgers.
Cuban is skeptical that Netflix or any other Web video service are serious long-term challengers to cable companies. On Monday, Cuban wrote a blog post called “The Future of TV is TV.” He was talking about traditional cable TV. Roettgers responded with a defense of Web video services.
Cuban responded again on Tuesday and made an interesting point–one customers of Netflix, the Web’s No. 1 video rental service, need to hear–especially those people who did most of the moaning about the company’s willingness to suspend rentals of newly released DVDs for a month to help some of the studios, including Warner Bros., protect disc sales.
Cuban credited Hastings and Netflix with successfully creating a market for streaming catalog titles but argued Netflix’s ability to offer feature films for as little as $10 a month doesn’t appear sustainable. Eventually, according to Cuban’s thesis, the cable companies and studios will throw up roadblocks.
“As the balance of revenues change, so could (Netflix’s) access,” Cuban wrote. “They already had to give up a 28-day window on movies. You don’t think that is their last concession, do you?”
A little background: Netflix is best known for delivering DVDs to subscribers via the U.S. Postal Service, but over the past year the company’s customers have increasingly embraced digital distribution of films. No more waiting for the mailman. Users of the Watch Instantly service have access to thousands of catalog titles and are streaming them with the help of an assortment of set-top boxes to their television sets via the Web. Netflix doesn’t charge extra for the streaming service–at least not yet.
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