Online Movie Business in trouble

[Elandyll]

http://www.imdb.com/news/sb/2008-04-24/

Amazon, Netflix Refuse To Discuss Download Business

Suggesting that the recent writers' strike may have represented a lot of fury signifying very little, two principal online movie retailers have declined to discuss results of their download services. The website ContentAgenda has observed that on Tuesday Netflix chief Reed Hastings and on Wednesday Amazon chief Jeff Bezos each refused to respond to questions from reporters about digital sales or what their companies are paying to generate them. Paul Sweeting, editor of ContentAgenda, commented: "What does it say about the pace of development in the digital media delivery business that two established, successful and savvy media retailers like Netflix and Amazon have nothing to show for their efforts? Nothing good, is what." Last November's writers' strike was triggered by demands by the writers for payment when shows they have written are offered on the Internet; likewise much of the current discussions between the Screen Actors Guild and the movie studios and TV networks centers on payments from digital media, but thus far, analysts have pointed out, there is little to suggest that any significant revenue is being generated from online movie services. In fact, several analysts have suggested that the recent tumble in Netflix stock may have been precipitated by the company's decision to invest heavily in its download service without demonstrating that it will generate sufficient revenue to justify the expense.