Will Netflix’s Popularity Be Its Downfall?

If you haven’t heard the news yet, Sony movies have been temporarily pulled from Netflix’s streaming service.  The reason?  Netflix is becoming too popular.  According to the contract that Netflix has with pay television channel Starz, Sony put a cap on streaming rights in regards to Netflix subscribers—over 23.5 million subscribers and no more streaming Sony movie.  This strange turn of events begs the question, will the growing popularity of Netflix become its downfall?

According to the LA Times, Starz said in a statement that “all parties are working diligently to resolve the issue and return the films to Netflix members.”  The reason that Netflix gave for the pulling of Sony films, in a message on its blog, was, “This is the result of a temporary contract issue between Sony and Starz and, while these two valued partners work through their differences, we hope you are enjoying the wide variety of new movies and TV shows added daily.”

It should be noted that Sony films are still available for DVD and Blu-ray rental through Netflix’s DVD by mail service.  The issue involves only the streaming of Sony films.  However, this could prove to be a pretty serious issue as more and more Netflix users favor streaming over the DVD-by-mail service.  Any of Netflix’s 23.5 million plus users hoping to stream Sony films like The Social Network will have to wait until the DVD arrives in their mailbox.  Ironic, isn’t it, that the reason they have to wait is because too many people have subscribed to Netflix?

And it’s not just Sony.  In recent months, networks have been giving Netflix the cold shoulder as they continue to grow and thrive.  As Netflix grows their subscriber base they pose a major threat to other subscription services like Hulu Plus, Comcast and others.  Blockbuster already took the brunt of Netflix success and services like HBO have held off on providing Netflix with content.  After all, if Netflix has HBO content, who will subscribe to HBO?

I think it’s clear that Netflix is in a catch-22 here.  They obviously want to gain as much content and as many subscribers as possible.  However, with their growth comes loss, as demonstrated by Sony streaming rights being rescinded as part of the Starz deal.  It will be interesting to see how Netflix protects themselves from similar takedowns in the future, as well as how their content library will change over the coming months and years as a result of their growth.  I’m also interested to hear from Netflix subscribers.  How do you feel about the fact that you can no longer stream Sony content?  Share your thoughts with us in the comments below.

Megan O’Neill is the resident web video enthusiast here at Social Times.  Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.

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