If I want to watch a movie that Netflix doesn’t have (which is most movies I want to watch–Netflix’s selection is slim pickins except for their self-produced content and movies that are old enough to be just old movies but not quite classics) I go to Amazon Prime and pay $3-4 and watch just about whatever I want, if it’s not free for my Prime subscription.
Why is Netflix leaving my money on the table?
I started with Netflix as a DVD subscriber and they had almost anything on DVD, probably still do, but I can’t bother with that anymore.
…are you suggesting that Netflix takes movies that are currently available on the standard subscription and only make them available if I pay them more money?
Or that Netflix completely change their model to the Amazon one, leaving me no reason to subscribe to them any more?
Edited to add:
This was, of course, a service only available to people in the US, and isn’t something that wouldn’t really work on a global scale.
At a guess, it’s because Amazon also sells those movies (digitally) and so they have different licensing agreements. Amazon is basically selling you the movie for a limited time in the retail space. Netflix isn’t in the retail movie business and doesn’t have the same licensing agreements and, as the primary competitor in the streaming space, other services have less incentive to give Netflix agreeable terms.
Amazon likely also has leverage because they are selling the movies retail. The “rental” service could be wrapped into the retail digital sales license and it’s better for the studios to get 66% of the streaming sale* than to potentially lose Amazon as a marketplace for movie sales.
(*Just a guess but that’s about standard for digital game sales so good enough for the example)
Netflix started making their own exclusive content because they were rapidly losing rights to streaming other content creators’ content, when those content creators all started setting up their own streaming services.
Netflix no longer has streaming rights to Star Wars, Marvel, and Disney movies, because those are now with Disney+. They don’t have streaming rights to Warner Brothers films, because those are with HBO Max (and will likely get folded into Discovery+). They don’t have streaming rights to Paramount films, because those are now with Paramount+.
Netflix isn’t leaving money on the table. They no longer have the ability to offer the OP those films via streaming, at any price.
Back to my previous point, it’s worth mentioning that the ability to rent movies on Amazon isn’t tied to the Prime subscription service at all. Anyone with $4 can rent a movie on Amazon, regardless of whether they’re a Prime member or not.
If being a Prime subscriber was required to rent the movies, maybe studios would fuss more since it would incentivize paying a sub to the competition. But it’s not and I wouldn’t be surprised if it was a separate division from the actual Prime Video sub service entirely (despite being under the same heading).
You can rent movies on various streaming services like Apple, YouTube, etc in addition to Amazon. Often these are movies not tied to a particular streaming service. No idea why Netflix does not do it.
Actually I think the reason that Netflix doesn’t offer this service is that they want to be perceived as offering all of this content for a fixed price.
I am suggesting that in addition to their current self-produced and free content, they add streaming rentals of movies that they currently don’t offer at all. If you now subscribe to Netflix to get their exclusive content, then I assume you would still want to subscribe at the existing rates, plus you would have a lot of other content available if you wanted to pay a nominal rental fee.
Not sure why you say that there would be no reason to subscribe. I subscribe to Amazon Prime, which includes Prime Video, which includes Amazon exclusives like The Marvelous Mrs. Maisel. Plus I can rent a lot of movies that are not Amazon exclusives.
But
I didn’t know that. Because I am a Prime member I don’t know what Amazon looks like to someone who is not a Prime member.
…and how would they get the rights to do that exactly? It would involve completely changing their business model. I can’t see them making enough from doing that to make it worthwhile.
I don’t subscribe to Amazon Prime because I don’t buy stuff from Amazon, most people here in NZ buy from Trade Me instead, and I don’t even think Amazon Prime is available here. Most stuff on Amazon Prime Video can be found on other local streaming services.
The only exception are videos that haven’t made it to streaming yet: and if I want one of those I go to Youtube or Amazon. But eventually they will make it to streaming: so I’m usually content to wait.
They sign an agreement with Disney (or Paramount or Sony or whoever) that says “we will pay you $X billion dollars for the right to stream certain movies from your catalog for a period of Y years”. Then they charge their customers some fee to ‘rent’ those streams.
If enough people stream the movie, Amazon does ok. If not, they lose money. Complicating this somewhat, Amazon is probably willing to take a loss on some movies or maybe even a lot of movies as the cost of having a big library to entice customers.
Basically, Netflix isn’t leaving money on the table so much as Amazon is to an extent willing to pay extra to have those movies available to rent. At least for now. If those deals end up not being financially viable, Amazon will have a decision to make on whether or not they even want to be in that business. There’s a reason they bought MGM - they want to be able to produce and own their own content and library.
Amazon is perfectly willing to lose money in the short term if they think their strategy will pay out in the long term. Or cut their losses if they don’t. Netflix is not as diversified and doesn’t quite have that luxury.
Looking into it, the Amazon “Prime Video Direct” service is, indeed, handled separately from their other subscription streaming licenses. Content owners submit to Amazon, Amazon chooses to license the material (I assume this is different for a major studio versus you or me and some guy doesn’t manually watch and review every movie Paramount offers) and then the owner gets 50% of the fee each time it’s rented:
Content providers receive 50% of net revenue. If you offer a season for purchase, customers who have purchased one or more episodes may be able to purchase the season for a discounted price. The season price is reduced by the amount the customer has already spent on previous episodes. You will receive 50% of net revenue for the episode and season purchases.
and
We generally license professionally produced, feature-length movies and TV shows that have been theatrically released, broadcast on a major TV network, or selected by a major film festival. Even if a title has one or more of these attributes, Prime Video may still choose not to license it. Conversely, Prime Video may choose to license a limited number of titles that haven’t been in theaters, broadcast, or selected by a major festival.
Content providers receive 50% of net revenue for titles that are available to buy or rent
The 50% going to Amazon covers their profit and the hosting/streaming overhead (data storage and bandwidth). But, unlike Netflix buying a license to stream material for X years, Amazon doesn’t pay up front for the privilege of renting movies. It’s more like a consignment arrangement.
[Edit: Whoops… Owner gets 50% of net revenue so I guess Amazon deducts the overhead cost before splitting the profit. Not that it really matters to us]
I don’t get why this would be something good. I like knowing that when I browse Netflix, anything that comes up is available to me to watch. If I found a title on Netflix I’d want to see and then have to pay more for it, on top of my subscription, that would piss me off.
I don’t pay to rent movies on Amazon and that has nothing to do with their Prime Video subscription.
It’s also possible that, while Disney, Paramount, etc. are willing to offer streaming of at least some of their content to Amazon, they’re unwilling to do the same to Netflix.
For one thing, Amazon offers far, far more than streaming video, and the studios may feel that they need to play ball with Amazon, in order to make sure that their other products (Blu-Rays, merchandise, etc.) are available on one of the biggest online retail sites. Netflix, meanwhile, effectively is a single-service company (though, yes, some people still get DVDs in the mail from them).
For another thing, many consumers use an Amazon product – a Fire TV device – to view streaming content (this site says that Fire TV is #2 in the market in the U.S., behind Roku). Disney, Paramount, HBO, etc. likely all want to make sure that their streaming apps are easily available on Fire TV; part of those negotiations may have included giving Amazon rights to stream some of their popular movies.
That is definitely not the way that Amazon streaming “rentals” work. Amazon is not taking the risk on whether the movie is popular enough, or earning excess profits if it’s more popular than anticipated.
Amazon is acting as a storefront and taking a fee on each rental, and the various rights-holders are getting the remainder.
Netflix could do something like this, but they don’t want to. There’s value in the simplicity of a single membership payment for all services.
ETA: See Eyebrows_0f_Doom’s comment for why they might not want to do this. It pisses off the customers.
Ok, so the details were not totally accurate, but it is largely how it works.
What movies are available for sale (or rent) and the period of time they are available are subject to licensing agreements between the owners of the content and Amazon (or whoever).
It’s why certain TV shows and movies are available first on Disney+ (or HBO or Paramount or whoever) before they can be bought/rented on Amazon. And why they may later not be available. The terms of availability for that content are certainly subject to contract and relevant fees are paid accordingly for the license. It’s also why content comes and goes from platforms. They can’t just offer anything and take a fee - the availability of that content in the first place is subject to license (and attendant negotiations for the larger content owners). To an extent, Amazon can get better deals because it’s not just a purveyor of content but also for Fire devices and general merchandise with a large customer base that would exist independent of content, so they can just take the “leave it” option if negotiations fail.
Netflix can possibly make similar deals for newly released movies but the terms are not likely to be favorable for the Netflix model and would be far from ‘leaving money on the table’. That’s a large part of why Netflix has been producing its own content.
If I remember correctly, Amazon already had the streaming rentals set up before they launched free Prime Video. It wasn’t something they decided to add on.
Many people are unaware that Netflix content is not monolithic. They have different licensing deals in each jurisdiction based on competing services. For example, Casual is a Hulu series. In Canada, Netflix has licensed it because Hulu doesn’t operate here.
I’m not convinced that’s true. Netflix doesn’t have the hardware business, but they have by far the largest base of streaming video customers. I expect that if Netflix wanted to rent movies the same way that many other streaming rental companies do, they could get reasonable terms from distributors.
The reason they don’t do it is that they don’t want to. They don’t think it’s worth the customer confusion and they don’t want to be just another rental service. They want to be the premier streaming subscription, and they consider the rental stuff to be a distraction.
Now, you have to take that with a grain of salt, because of course if Netflix were unable to extract favorable terms from various movie studios, they’d probably want to spin it as something they chose to do. But it rings true to me. There have been lots and lots of “rent a streaming movie for $5” offerings from various companies over the years. Netflix doesn’t want to be one of them.
It would be good for Netflix because they would sell content in additional to what they currently offer. It would be good for customers because you would be able to see everything included in your current subscription plus have the option to buy other content. As far as not getting customers pissed off they could segregate included content from premium content to set customer expectations.
Unlike the DVD days, they wouldn’t be able to license all possible movies for streaming. Oscar-winner CODA was produced by Apple and AFAIK available only on Apple+. I think Amazon had a hit movie or two also.