Monday, December 6, 2010

Re: [MISP] Understanding the Netflix Business Model



Good points Tetsuki, can you tell us how much Netflix paid for per copy? I know they have 58 distribution centers, if they bought 10 for each center that would be 580. The normal purchase is 3 for each center - 174 copies. Revenue share for streaming per play my understanding is 67% for most streaming services and Netflix is actually a ASCAP - BMI model.  


On Dec 6, 2010, at 3:05 PM, Tetsuki Ijichi wrote:

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My company Tidepoint Pictures has been working with Netflix for more than 8 years through a few different physical video distributors, however, Netflix will buy out 100 copies up to 600 copies from the distributors and producers for their rental use.  Now they are focusing on VOD services.  

Recently we sub-licensed our Japanese film Noriko's Dinner Table for them.  Most of the VOD streaming services will still have a revenue share structure.  Netflix is one of the few companies to acquire the rights for a ceartain term.  So, We need more Netflix' competitors, I think.  That's my additional note.

Tetsuki Ijichi


On 2010/12/06, at 午前10:33, Kenneth Knoll <knoll@SOUTHWESTONLINE.COM> wrote:

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If you own a car rental business you buy a bunch of cars for a price and then you rent that car out to many people. It has to do with tangible items. Now streaming is not a tangible item, it is data. Your example of the Library deal is a licensing agreement. A little different. Self regulation, a Republican concert. WHAT!!!!


On Dec 6, 2010, at 10:26 AM, Jim Terr wrote:

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Truly fascinating article. I always wondered how Netflix could make money with sending out all those DVDs, and it looks like they barely do, and their streaming model is indeed headed for disaster unless they can get a much cheaper licensing rate - and why should they?

And I'm surprised this "doctrine" which allows them to mail DVDs isn't pulled out from under them:

For this mail-in business, Netflix did not need the approval of the studios. It simply buys DVDs, as does anyone else, from retailers such as Wal-Mart then mails them out to subscribers. What makes this form of rental  legal is the "first sale doctrine," which holds that once a person buys a DVD, he can rent it out to others without the permission of the copyright holder.

In fact, when I sell my documentaries to libraries, they ask specifically for "library rights", meaning as I understand it that they can have showings -- I wonder how this relates to this "first sale doctrine," which seems more liberal / all-encompassing.

Thanks, Kenneth - interesting info. Here's the link in case it didn't come through for some the first time.

http://www.thewrap.com/movies/blog-post/netflix-streaming-its-way-towards-disaster-23019?page=0,0





On 12/6/2010 10:03 AM, Kenneth Knoll wrote:
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A lot of independent film makers really don't understand the Netflix business model, the link below is right on mark.

http://www.thewrap.com/movies/blog-post/netflix-streaming-its-way-towards-disaster-23019?page=0,0

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