If you’ve been following the rumbles, it seems Apple is going to be announcing a set-top box that will run iOS, the same operating system that’s on iPhones and iPads. The one with the apps. Netflix app. Hulu app. (UPDATE: This prediction turned out to be premature, although the hardware is ready for it any time Apple decides to grow a pair.)
Likewise, we already know Google is teaming with Sony, Logitech and Intel to integrate it’s own streaming content interface into televisions, cable boxes and Blu-ray players.
The cable companies, meanwhile, have the warchests they’ve been building up from the virtual monopolies the government continues to allow, so long as the campaign contributions continue.
I don’t know how it’s going to all shake out, but I do believe it will be akin to trench fighting: one massive media meatgrinder. Google and Apple are two of the deepest-pocketed media companies post-financial-crisis, and companies like Netflix that want to play ball on their new fields have already indicated a willingness to pay big money for major content. Cable companies rightly view this as the shot across the bow in a fight for their lives. Why would a consumer pay for cable TV and internet, when the internet has everything the TV has? Why buy a bundle of channels just to get Discovery when you can buy the Discovery Channel app a la carte? (There are reasons, but they aren’t apparent to consumers.) The cable companies and TV networks are right where the recording industry was ten years ago, but they are determined not to make the same mistakes and have already begun making moves to adapt. (Hulu is their most successful gambit thus far.)
The survivors in the coming armageddon will probably be the companies that offer a broad selection of content at a low price early on, because a marginal lead in subscriber numbers, through network effects, can over time lead to decisive victories.
But you’re just a lowly independent filmmaker. You may only have one movie to sell. What can you do to get through this carnage?
Play one side against the other, on whatever scale you can leverage! You control a precious resource: content. The more you control, the better your position. As I’ve advocated, indie filmmakers need to start bundling their movies together into libraries. As a representative of a block of films (or just one film that is well-known) you have the ability to milk all sides for the streaming and other digital rights, and negotiate non-exclusive, short window contracts.
Netflix reportedly paid $32M to Relativity Media for a year’s worth of non-exclusive streaming rights. What did Relativity have to offer? Charlie St. Cloud, Macgruber and, to be fair, some movies that were big hits, like 300. This is just for Netflix to offer these titles through Netflix. Non-exclusively, so Relativity is still free to rake in more cash from other streaming platforms.
This deal certainly points a way forward for large independent producers. But still, it’s going to be a little while until Netflix has worked its way down the long tail to smaller independent producers. Now is the time to get positioned and, like a musician who owns her own masters, get rich by not selling out!
UPDATE 10/24/10: Mark Cuban thinks Netflix may have already won the streaming wars.
UPDATE 10/17/11: Check out my list of streaming movie outlets for indie filmmakers.