Fearing iTunes-Like Domination, Hollywood Plots Netflix's Downfall

Shocking news: Hollywood is not a fan of Netfix. Movie studios have started to become concerned with the company’s growing influence, and they’re determined to prevent it from becoming the next iTunes, so big and powerful that it can dictate terms. The solution? Turn Netflix into a “swap meet,” where users can only find low-quality movies, that is, not the top-of-the-crop Hollywood blockbusters that so many Americans seem to enjoy.

The deal, as explained by Cnet, is that Hollywood used to see Netflix as a harmless company providing a cute little service to a niche audience. (The Internet? Streaming? What am I, a nerd?) But then Netflix experienced an explosion in popularity, with the company seeing a 66 percent growth in subscribers in the year leading up to last December. And given Netflix’s ubiquity—you can find it on many Blu-ray players, the Xbox 360/PS3/Wii, etc.—it’s hard to imagine a scenario where people will all of a sudden stop using the service.

Unless, of course, Hollywood drains the life out of it.

Since Netflix is no longer seen as a harmless little company—the studios are complaining that it’s eating in airline movie sales, DVD sales, and that cable companies will no longer pay for movie rights because Netflix eliminates movie “scarcity”—Hollywood now sees itself in a prickly situation. Do you go with the flow, and try to figure out how to make Netflix “work” for you, or do you try to eliminate the threat while you still can?

I’m sure you know the answer to that one.

If Hollywood were to stop playing ball with Netflix, then the service goes away, right? Who’s going to keep paying $8 per month to have access to lame movies? (This assumes you don’t already think most of Hollywood’s movies are lame.) And once people stop paying for Netflix, the company goes out of business, then the studios can resume selling us shiny plastic discs.

That’s what they’re hoping will happen, at least.