Editors' note: This is a guest column. See the bios of Robert Hahn and Peter Passell below.
All right, we'll say it: We love Netflix, the company that has made it so easy to watch any of thousands of movies anywhere, with hardly a moment's forethought. And we're not alone. The company boasts close to 26 million subscribers in the United States and Canada, and it recently announced plans to expand to 43 countries in Latin America and the Caribbean.
But Netflix can't succeed without a lot of help from its partners in the digital supply chain. The company is only as good as the programming it offers. And content owners are apparently inclined to drive a harder bargain these days: Netflix paid a whopping nine times as much for streaming rights in the second quarter of 2011 as it did the same quarter a year earlier.
More relevant here is Netflix's rapid shift from being a supplier of rental DVDs by mail to video-streaming delivery on demand. The company last month separated its DVD-by-mail service from its streaming business by creating a DVD-only subscription and raising the base price for the combined service by nearly 60 percent, a move that raised the ire of many subscribers. … Read more