Netflix and Relativity Sign Deal, Cable TV Shudders

I’ve never been one to predict the future, but seeing as how Blockbuster got delisted from the NYSE last week, I think it’s safe to say that the home video business is going the way of the dinosaur very soon. As someone who used to work for the company, I say it’s about time, as their business model has nothing to do with customer service, and all about turning a buck in order to hang on to that last, dying breath that will spell the end of ever having to go into a DVD store to rent a movie.

Recently, the cable industry was dealt a blow of their own thanks to Netflix. Maybe you heard about it? Netflix has signed a deal with Relativity Media, who have the backing of such media giants as Lions Gate, Sony, and Universal Studios. What that means is that you’ll no longer have to wait a year or two to see one of their films on television channels such as HBO, Showtime, or Starz. No, instead you will be able to stream theatrical films just a couple of months after their release on DVD, direct from Netflix. Hallelujah!

Now you’re probably saying to yourself, “But James, what’s the point of doing that when I can put the DVD in my cue right when it comes out and have it delivered straight to my home?” Well, I’m glad you asked me that. See, not everyone is a movie hound like you. The average person goes to the movies four or five times a year. That’s not a lot considering the number of films that come out in a calendar year. Think it gets better when those films make their way to DVD? No so. People don’t rush out to get the latest DVD release in the week it comes out. It could be a few weeks, or evenĀ  a couple of months before they get to see it. Therefore, when they want to see the latest film from Relativity Media, they can stream it through Netflix, either on their computer or television, giving the company an advantage over cable.

That’s the beauty of deals like this. You can’t always see the benefit of it at first, but then when you factor in things such as time, family, work, and play, you quickly realize that yes, maybe I don’t have to see that DVD right away, since it will be available shortly on streaming video.

What is this going to do for cable in the future? Well, probably not much at first. I think that other studios will be waiting to see how this plays out before jumping on the bandwagon and signing any deals of their own. Should this partnership between Netflix and Relativity Media prove successful though (and I’m guessing it will), look for more of the bigger Hollywood studios to get in on the action. When that happens, cable television will have to do some wheeling and dealing of their own in order to keep up with the business that is online video because, frankly, it’s not going anywhere.

Oh, and in case you were wondering what sorts of films Relativity Media distributes? Well, current films include Robin Hood, Get Him to the Greek, and Grown Ups. The first films to be shown on Netflix as part of this deal will be The Fighter, with Christian Bale, Mark Wahlberg, and Amy Adams, as well as Skyline, Season of the Witch, and Move 43.