Netflix’s big problem, it seems to me, is that it can’t afford the
content that its subscribers most want to watch. It could try to
buy streaming rights to every major Hollywood blockbuster in
history — but doing so would cost hundreds of billions of
dollars, and could never be recouped with $7.99 monthly fees.
What’s more, the studios can watch the Netflix share price as
easily as anybody else, and when they see it ending 2013 at $360 a
share, valuing the company at well over $20 billion, that’s their
sign to start raising rates sharply during the next round of
negotiations. Which in turn helps explain why Netflix is losing so
many great movies.
Netflix’s movie selection is getting so bad that I’m quite surprised when it actually has a movie I’m looking for.