Netflix is experiencing a 'backlash' from cable TV and worried Hollywood studios

Industry insiders have expressed concern about Netflix establishing a dominant monopoly on content creation.
Winona Ryder in a still from the hit Netflix series Stranger Things.
Winona Ryder in a still from the hit Netflix series Stranger Things.

Is Netflix getting too big for its britches?

That seems to be the question on at least some of those competing with the streaming giant are asking themselves.

Over the weekend 21st Century Fox filed a lawsuit against the popular online service for poaching its top staff.

Filed in a Californian court, the complaint claims Netflix is responsible for a "brazen campaign to unlawfully target, ­recruit, and poach valuable Fox executives by illegally inducing them to break their employment contracts with Fox to work at Netflix".

The suit revolves around two senior fox executives who recently took job with Netflix, despite threats by Fox that Netflix's conduct was illegal.

"As a direct and proximate result of Netflix's conduct, Fox has suffered great and irreparable harm," the lawsuit said.

However Netflix is standing by its actions.

"We intend to defend this lawsuit ­vigorously. We do not believe Fox's use of fixed-term employment contracts in this manner are enforceable," a Netflix spokesman said in a written statement.

"We believe in employee mobility and will fight for the right to hire great colleagues no matter where they work."

It comes just days after industry insiders expressed concerns about a content monopoly as Netflix uses its considerable wealth to expand its focus on original content.

When the streaming service first emerged, it relied heavily on licensing TV shows from rights holders such as studios and cable TV companies. At first this was a great thing for traditional TV channels which found another buyer for programs that may have been past their usefulness.

However Netflix is now spending nearly US$8 billion a year on creating original content and its competitors are worried about an Apple-like dominance when it comes to TV content.

"Nobody really thought they'd be a competitor on the originals market," one television agent told the Hollywood Reporter.

"They used stuff from the studios and became important. Now you see the backlash."
With over 80 million global subscribers, it remains to be seen if Netflix can turn its Silicon Valley ethos and recent ascendancy into an Apple-like dominance of original TV content, but its clear that traditional media is getting increasingly worried about its ability to keep up.


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