Sony exec in Netflix smackdown

Netflix might face additional headaches, on top of the massive subscriber backlash sparked by CEO Reed Hastings’ decision to split the company’s DVD rental and video streaming operations into two companies, one media executive said yesterday.

Sony CFO Rob Wiesenthal said Netflix’s evolution might force it to rethink its content deals.

“When Netflix started they went around to the studio and it was about red envelopes and the cost of sending them around, when the discussion about streaming happened it was a unique add-on feature,” Wiesenthal said. “Now the tail is the dog and the dog is the tail and that value has to be recognized.”

Premium pay-TV firm Starz is ending its contract to supply Sony and Disney movies to Netflix in February.

Sony content disappeared from Netflix when subscribers streamed an unexpectedly large amount of content that breached the deal’s cap.