Netflix needs to offer a wider selection for online streaming, However, this is a challenge because the movie studios do not want to cooperate with Netflix because online streaming would impact their revenue on DVD sales and digital downloads. The article below suggests that movie studios like Time Warner intend to make it more expensive for movie renters like Netflix to stream content, in addition to extending the amount of time before a movie is available on DVD.
http://articles.latimes.com/2011/feb/03/business/la-fi-ct-time-warner-20110203 despite this challenge, the market is shifting away from DVD renting towards streaming. Netflix needs to offer its customers the same, varied selection but with the new convenience of streaming. if it is going to cost Netflix more money to acquire the rights to stream newer releases, it could subsidize the cost by selling advertising space similar to what Hulu offers.
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