With a market cap of $85.46 billion and an annual content budget of over $7 billion, Netflix is now beyond the competitive punching weight of most traditional programming conglomerates, says IAC chief Barry Diller.
“They are so far ahead of everyone else, it’s impossible to compete with them,” Diller said, speaking at the Wall Street Journal’s WSJ D.Live conference in Laguna Beach, California.
“The only viable competitor to Netflix was Amazon. … That’s a business model that entertainment has never had to compete with.”
Netflix’s primary goal is to sign up more subscribers, both internationally and domestically. Amazon wants to drive its retail business. These are very different objectives when compared to trying to pump up Nielsen and comScore ratings.
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Diller’s comments echo concerns expressed over the summer by FX President John Landgraf, who said the loss-leader strategies of the major SVOD services present a competitive problem for his network.
“Understand that a good share of [original series] programming is being produced at a loss, in the belief that it will drive a massive shift in the share of consumption that will swamp competitors,” Landgraf said.
Of course, Hollywood programming conglomerates used to respond to competitive threats by purchasing them.
“Guess what? They ain’t buying Amazon, and they are not going to buy Netflix,” Diller said.