Skip to content
Subscriber Only

Netflix Would Like Very Much to Change the Channel

Arrested Development's Will Arnett and Portia de Rossi, in the 'Exit Strategy', which aired during season 3, in 2006.
Arrested Development's Will Arnett and Portia de Rossi, in the 'Exit Strategy', which aired during season 3, in 2006.Photograph by Everett Collection

Shares of Netflix closed down on Tuesday. Again. This time, it was due to the news that one of its exclusive suppliers of movie rights has signed on with Amazon’s rival streaming-video service. Netflix shares fell $3.79 a share, or 6 percent, on Tuesday and have lost more than 80 percent of their value since hitting an all-time high just 13 months ago.

By horning in on the Netflix supplier—Epix, a consortium that controls the rights to such hits as The Avengers and The Hunger Games—Amazon has just made Netflix’s library a little less special and a little less worth subscribing to. Another contract with Starz went nonexclusive earlier this year. Analysts who are pessimistic about the Los Gatos, Calif., company see a bad trend in which Netflix’s library of movies and TV shows gets gradually replicated by Amazon, Redbox Instant, Hulu, iTunes, and other video services. If the companies all offer similar content, the only way they can compete is on price, and Netflix—with no hardware sales or advertising revenue to rely on—would probably not fare well in that contest. A subscription to Amazon Prime costs $79 per year and includes free two-day shipping for the site’s physical goods, while Netflix costs about $96.