Netflix Backlash Begins

Netflix suffered a couple setbacks this week at the hands of Showtime and Starz. According to the Los Angeles Times, Showtime will no longer provide old seasons of "Dexter" and "Californication" for streaming, and Starz will delay streaming episodes of its new series "Camelot" by 90 days. Starz may also withhold movies from Netflix streaming in the future, the LA Times reports.

We've been hearing for a while that Hollywood is afraid of Netflix. For $8 per month, the service provides a huge library of on-demand movies and TV shows, and has the potential to pull people away from existing revenue streams, such as DVD, video on demand and, in the case of Showtime and Starz, premium subscription television.

But as far as I know, that fear hasn't produced any tangible effect on Netflix's streaming service until now. With Showtime and Starz retracting content, we're seeing the first signs of a Netflix streaming backlash.

If you're a Netflix subscriber, this is bad news, of course, but there is a silver lining: In the future, Netflix may prove that it doesn't need first-run television series from Showtime and Starz. Earlier this month, Netflix announced that it will stream its first exclusive TV series, House of Cards, in 2012. The show will star Kevin Spacey, and David Fincher is on board as director. Although Netflix has downplayed the significance of this development, I'm with Harry on this one: House of Cards could be a game-changer.

Still, House of Cards is no panacea. Netflix still needs great content from other sources for its streaming service to grow, but Netflix's growth is what makes Hollywood so nervous in the first place. This is going to get ugly.

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