Netflix vs. Hollywood

Studio heads are balking at plan to deliver films directly to your TV or PC

Last Updated: December 30, 2009 @ 8:29 AM

In the paranoid precincts of Hollywood, a question has been making the rounds: Is Ted Sarandos friend or foe?

Sarandos is the content chief at Netflix and one of the studios’ most devoted customers. Each year, on behalf of his company, he buys an estimated $240 million worth of DVDs that Netflix then mails out to its subscribers. All was going well until Sarandos last year cut a deal with Starz, the movie channel, to stream Walt Disney and Sony films, including "Ratatouille" and "Spider-Man 3," to subscribers’ PCs, Web-connected TVs, and game consoles. For an industry that jealously protects its right to license movies to the highest bidder, the move amounted to an end run.

Why would Sarandos risk angering Hollywood?

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