As a result, battle lines are being drawn. On one side, Netflix is signing deals with some studios. For example, it will stream content from Warner Brothers, NBC Universal, Paramount, Lionsgate, and MGM. Simultaneously, worried that Netflix is undercutting DVD and Blu-ray sales as well as cable-channel viewership, other companies are seeking ways to beat back Netflix such as extending the time that it must wait before getting access to new releases and by raising the prices that it pays for content rights.

No matter how the cards get dealt, this is shaping up to be the biggest game of high-stakes poker since the music industry folded. In fact, given the colossal amount of cash on the table, this will dwarf the whole Napster and iTunes thing. Unless the established industries figure out a winning strategy, the battle might not be between the old and new paradigms. Rather, the old paradigm might lose outright, and the real battle might be over how players like Netflix, Apple, Amazon, and Google divide up the spoils.

Here’s another screenplay I’m working on: It’s called The Revenge of Tinsel Town. A little company starts renting DVDs by mail and becomes wildly successful. Hollywood, along with the cable and satellite industries, fights back and slowly turns the tide. People abandon movie downloading and Internet streaming. Instead, they start buying movies on shiny discs again and re-up their cable subscriptions. In an extra surprise twist, the music industry resurges, and people start buying CDs again. And the price of gas goes to $1 a gallon. The End.

Hmm, I might have a hard time selling that one.