The company that almost single-handily took down Blockbuster and every Mom & Pop video store in the country is now on its way out the door as well. Netflix has announced that they have filed for chapter 11 bankruptcy, and will be shutting down most of their services by the end of the year. Having already mostly abandoned their original model of DVDs-By-Mail, the company says the amount of illegal downloads from peer-to-peer file sharing sites has put the final nail in the coffin for the once-powerhouse movie provider.
“When we started, this system was gold, but now people can get their content anywhere,” said Carl Kazaa, CEO of Netflix. “With the leak of The Expendables 3 a few weeks ago cutting massively into the profits of the film’s box office take, we realized that customers don’t care about 99% of the films we have streaming at all. They want new films, movies that aren’t even released to theatres yet. They can’t wait anymore. They just can’t wait. A subscriber will drop us the second they discover they can get a movie free from the bowels of the internet. Especially if it’s a film we don’t have available.”
The Expendables 3, the PG-13 action film starring Sylvester Stallone and Jason Statham, had a near-DVD quality copy of the movie leak to the internet almost a full month before the film hit theatres. The film has performed poorly at the box office in comparison to its previous films, and many studio insiders blame the leak, and illegal downloads and streams, for the poor ticket sales.
“We were charging such a low amount of money for our service, but spending hundreds of millions of dollars to get these old movies. I love films like Commando, The Stupids, and The Shaggy Dog, but people weren’t watching them,” said Netflix CFO Paul Bay. “We spent $40 million dollars to get the rights to stream all the Indiana Jones films, but people aren’t even watching those movies – and they’re classics! We should have just been a TV-streaming service. That’s where we make our money.”
Netflix had a small influx in subscribers after shows like House of Cards and Orange is the New Black caught people’s attention. The lower-budget, in-house productions made money for Netflix, because they weren’t having to buy the rights at a marked-up price from other companies.
“Sadly, even House of Cards is one of the most illegally downloaded shows on the internet right now,” said Kazaa. “If you search for ‘House of Cards+Torrent’ on Google, you get almost 3 million results. It’s sad that people would rather steal our content than just pay the $9.99 a month, but apparently that’s how it goes.”
The company plans to re-sell the streaming rights they have purchased to their films, with most contracts running out sometime in 2016, to other companies that offer similar services, including Hulu and Amazon.
“We are extremely excited to snag all of Netflix’s mediocre film and awesome TV content at a discounted rate,” said Tom Rent, marketing director at Amazon. “Piracy and illegal downloads haven’t hit us too hard, but again, we’re not a one-trick pony. We have all this media streaming, but we’re also the biggest online retailer on the planet, so we’re not hard-up for subscribers or anything.”
“With websites like ThePirateBay ‘releasing’ movies days, weeks, and occasionally months before they are available anywhere else, we just couldn’t keep competing,” said Kazaa. “It’s a sad truth. People want their content yesterday, and they can’t keep waiting for it. The binge-watching that we’ve created with shows has put people into a frenzy of ‘need it now,’ and they’ve proven that what they need isn’t necessarily something they want to pay for.”