When Netflix began to offer streaming movies as part of its online rental plan back in 2008, most people didn't seem to care much. In the intervening three years, however, streaming popularity exploded -- thanks to the proliferation of set-top boxes, multimedia phones and video game systems that could be used to view the content from the comfort of a couch (or pretty much anywhere with a smartphone) without waiting for a disc to arrive in the mail. As many as 5 million subscribers now stream their content instead of using the more traditional mail-order service. This has been a boon for the company since it saves them the cost of postage and shipping fees.
Netflix has been at the vanguard of the streaming movies movement, but things are changing. Competitors are trying to horn in on the action, including Amazon.com. The Internet retailer is offering free streaming services to those customers who sign up for its Amazon Prime program. Apple's iTunes store has been streaming content for a while now, and Facebook could be a potential competitor as well, with their recent deal to stream Warner Bros.' 'The Dark Knight,' possibly opening the floodgates for more movies on the social networking site. This says nothing of the studios, television networks and Hulu -- all who stream content too.
While all of those things are potentially damaging to Netflix's market share, there's a much darker and dangerous menace lurking on the horizon: studio licensing fees.