No Longer Tiny, Netflix Gets Respect -and Creates Fear

Netflix's growth surge—at a time of weak DVD sales and increasingly fragmented TV audiences—prompts concern among movie and TV studios as well as other technology companies. One big worry is that the company could end up dominating the electronic distribution of movies and TV the way Apple Inc.'s iTunes Store dominates music. To prevent that, entertainment and technology companies are exploring plans to outflank Netflix with their own offerings. Amazon.com Inc. is developing a Netflix-like subscription service that would offer TV shows and movies, according to people familiar with the matter. That service would be included as a bundle with its Amazon Prime shipping service, which costs $79 a year, those people said. An Amazon spokesman didn't respond to a request for comment. Media companies, meantime, have talked to Microsoft Corp. and Sony Corp., both of which provide access to Netflix's streaming service through their videogame consoles, about licensing TV shows directly to the two companies for offering through subscriptions, said people briefed on the conversations. A spokesman for Microsoft, which already cut one such deal with Walt Disney Co.'s ESPN, declined to comment. A Sony spokesman didn't respond to a request for comment. TV maker Vizio Inc. also has expressed interest securing video content for a subscription service, according to people familiar with the talks. A Vizio spokesman declined to comment.

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