It's been about five years since we posted a story about how the record labels were pissed off at Steve Jobs and Apple for building such a successful online music store in iTunes. The whole thing sounded counterintuitive. Prior to iTunes, the record labels had tried a series of dreadfully awful online music stores with horrible selection, crippling limitations, and ridiculous prices. While iTunes still isn't the savior that some in the industry think, it did drag the industry forward. And... for that, the labels resented Apple. It was basically because Apple had become the gatekeeper - the position they were used to holding.

These days, it sounds like the movie studios are going through the same sort of experience with Netflix. A recent story highlighted how the heads of major studios are getting upset about how successful Netflix has been with its online streaming offering. They literally are complaining that Netflix has been too good at getting customers to use online streaming:

"The problem is that Netflix is not the company we thought it was when we started doing these deals a few years ago. It has changed," said a studio executive who requested anonymity because the studio's discussions were confidential.


Of course, as was the case with the labels and Apple, what's really going on is that the studios want a bigger cut. It's a case of overvaluing the content, and undervaluing the service. What the studio bosses refuse to admit is that it's the service that is working. There have been many attempts at offering streaming or download movies, and none of them did well, because they all sucked. They had the same content (or, in some cases better content), but since the services were so bad, no one used them. That seems like pretty clear evidence that it's the service that made this a success - but they can't bring themselves to admit that. So, instead, they rag on Netflix and talk about how "unfair" it is that Netflix isn't paying them enough. And these are the same execs who complain about customers having an "entitlement mentality"?