In a recent New York Times Interview with Time Warner CEO Jeff Bewkes, the subject of Netflix came up . Bewkes held firm to the assertion that Netflix is actually a very small player with no power to affect the industry. He compared the disc rental and streaming company to the Albanian military, strangely. "It’s a little bit like, is the Albanian army going to take over the world?" Bewkes quipped. "I don’t think so."
The Time Warner chief continued to rail against Netflix claiming they had undermined the video rental industry. We would have to agree with that, considering the state of Blockbuster. Still, Bewkes maintained that Time Warner did not know Netflix would cause consumers to shift away from purchasing and renting from brick and mortar stores. We're struck by how well Mr. Bewkes manages to lay out Netflix's notable impact, while at the same time saying they are not significant in the market.
All this comes back to the Starz deal that allows Neflix to stream many newer releases. Time Warner owns Starz, and Bewkes insinuated they might not renew the deal when it expires in a few years. Whether or not production companies see Netflix as a major player, the service is winning over consumers. When the Starz deal, expires, content companies might have no choice but to deal with the juggernaut that is Netflix. Some, like Bewkes, have demanded that Netflix charge more to better support content licenses. How much would you pay for Netflix streaming, assuming more licensing deals came through?