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The streaming business is hostage to the content owners. When Netflix bought the DVDs, the content owners couldn’t take them back and start charging more for them. The content owners don’t want a single streaming provider to win, they want streaming providers to bid high prices for exclusivity. This is forcing Netflix to undertake unpopular price hikes to maintain their all-you-can-eat model.
Why didn’t Hastings blame the price increases on the streaming providers? It makes the company look too weak to investors. They don’t own their inventory anymore, and they become a utility business, where they will not be able to charge much of a premium on their costs. Also, he’s the one that bid up some of these deals- and failed to get others.
A better next business is streaming is to take the (old) Google model, and provide unified access to multiple providers streaming inventory. Google themselves can’t do this, because the content providers won’t negotiate fair prices with them- witness the Google TV debacle where they blocked free content from Google devices in a naked attempt to get some of Google’s cash. A single provider that simply negotiates pricing agreements with every vendor and passes the streaming costs directly on to you. This doesn’t jibe well with the all-you-can-eat pricing model, but a flavor of that (base price includes n hours or points of streaming per month with each additional point at a cost) could be made to work.
