Will Apple’s (APPL) studio deal help Netflix? Nope, but that’s the case the Motley Fool is making. Their reasoning? Netflix’s (NFLX) “Watch It Now” feature has been hobbled by a dearth of content. But now that virtually all of Hollywood has signed on to release films digitally on the same day they are released on DVD–so-called “day-and-date” releases–other online distributors can expect to sign similar deals, helping the likes of Netflix, Amazon, and maybe even Blockbuster, if it can get its act together.
Here’s the problem with that reasoning: Not every digital distributor can sell new releases as a loss leader, as Apple (APPL) appears to be preparing to do. Apple is buying new releases for $16 and selling them for $14.99, a fine thing to do if you’re using digital media to sustain very profitable iPod sales. Not a great idea for Netflix or anyone else in the movie distribution business.
Business Insider Emails & Alerts
Site highlights each day to your inbox.