Hollywood wants share of Netflix's windfall

From CNET News.com: Who could begrudge Reed Hastings and his Netflix management team from celebrating at this point--the corporate equivalent of an end-zone dance?

Wall Street and Netflix subscribers appear overjoyed with the direction that Netflix's CEO has the Web's top video-rental store pointed in. The only people who don't seem pleased with Netflix's success work in Hollywood.

Just days before Netflix reported third-quarter earnings that jumped 48 percent from a year ago and subscriber growth of 28 percent during the same period, two executives from different studios told me they aren't getting their fair share.

"The thing with Netflix is that people are taking notice that they keep reporting these big quarters," said one studio exec. "We aren't participating in that and that's going to change."

Another entertainment executive told me Netflix contributes less to the studios' bottom line than other distribution modes, such as DVD sales. In addition, Netflix and other digital rental stores, including iTunes, may also be luring customers away from these more profitable outlets. He said that the film industry is just like any other supplier--it wants to see the partners who pay most for its product fare the best.

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