Traditional TV distributors and content creators just got more to worry about. Netflix movies don’t have to be actually good anymore, they just don’t have to be disappointing. The power of the brand drives satisfaction and for cable, satellite TV and telco TV operators that should be terrifying.

In a research note Sanford Bernstein media analyst Todd Juenger addressed concerns whether Netflix’s $12 billion content budget is money well spent. The law of averages would assume that at some point, Netflix has to release a string of duds, which will panic investors and send the stock into a tailspin, thus justifying the traditional pay TV business model and we can all rest easy like it’s 1990 and cable will just keep growing and growing, right?

No, no, no, no and wrong.

Juenger pointed to Will Smith sci-fi vehicle Bright, which Netflix released in December and critics lambasted as “wretched,” “an absolute mess”  and “a movie with blockbuster aspirations and faerie-sized brains.” So it’s no surprise that the movie, which sported a $90 million budget, got a 27% rating on Rotten Tomatoes. What was surprising, is that viewers liked it. A lot.

According to Nielsen data, more than 13 million Netflix subscribers watched Bright on its opening week, and its Rotten Tomatoes audience score is currently 85%. For Juenger that disparity isn’t so much a condemnation of the general public’s grasp of cinematic excellence (or failure) but that Netflix not only shouldn’t care about critics, they actually don’t.

Want proof? Netflix announced in January that it has greenlighted a Bright sequel.

Netflix also has its share of critically acclaimed programming – Icarus won the Academy Award for Best Documentary last week and its documentaries have garnered several Oscar nominations dating back to 2013. This year Mary J. Blige was nominated for Best Actress for a Netflix movie, Mudbound, which also attracted nominations for Best Adapted Screenplay, Original Song and Cinematography. Netflix also has won scores of Emmy Awards in the past several years, so on that front, it is far from a slouch.

Netflix CEO Reed Hastings has said the success of Bright highlights the disconnect between critics and the general public, and also points to the differences between international and U.S. audiences – the movie did better overseas.

But Juenger believes that it also shows the positive association Netflix customers have with the brand – it’s fun to use and only costs $10 a month – which he says makes Netflix customers pre-disposed to reacting favorably to practically anything the company does.

“In other words, they go into a Netflix show expecting to like it,” Juenger wrote. “So guess what, when they are finished, they confirm their bias and tell themselves they did. A self-fulfilling prophecy.”

But Juenger doesn’t believe it stops there. He argues that in many cases, if you put the same show on any cable network, the reaction would be the opposite.

“Much to the frustration of TV executives, we believe there are scores of shows that have been launched on traditional TV in recent years, and failed, that would have had a completely different (positive) reception had they been launched on Netflix,” Juenger wrote. “…We don't think the huge consumption and positive reviews from Netflix members are a result of that community believing it was an amazing piece of cinematic art. We think much more likely they found it a fun, guilty pleasure, something different and bite-sized, with a big Hollywood star and some special effects, that they could watch with their date, or spouse, or family some weekend evening – for ‘free.’”

While Bright should make some TV executives nervous, Juenger also pointed to a new TV series that should keep them up nights.

Dark isn’t the first Netflix hit to be offered in a foreign language – that honor should probably go to Narcos. But while Narcos had subject matter familiar to U.S. viewers – the Colombian drug trade – and was offered in a language (Spanish) that is familiar to millions of Americans, Dark was not. Shot in Germany in German, Dark is a supernatural thriller that follows four families in a fictional town as they investigate the disappearance of several children. Many saw the series as an attempt by Netflix to attract local foreign audiences. But according to Netflix chief product officer Greg Peters, more than 90% of Dark’s viewership came from outside Germany. That should send shivers down the collective spines of U.S. TV executives.  

Because that means that not only does Netflix get an “A” for brand recognition, quality and satisfaction– do you know of a single cable operator who can even come close? – now it doesn’t even matter if viewers can understand its shows. Sure, there are English subtitles, but Americans are supposed to hate to read, especially when they’re watching TV. Netflix has upended another tried and true American idiom.

I have said for years that cable operators don’t deserve their bad service reputation – ask the average schlub if they hate their cable company and most will respond with an enthusiastic “Yes!” Then ask them if they love their broadband provider (most likely a cable company) and they will respond in the affirmative with equal enthusiasm. Cable has tried for years to break that chain and they have made some progress, but they are nowhere near the finish line.

On the flip side, streaming services have been plagued by frequent service outages almost from the get-go, and yet inspire a fraction of the hatred of their cable counterparts.

But this seems different. Cable has for years been the go-to place for quality programming – in fact, Netflix was built on the back of past seasons of cable shows like Breaking Bad and others. It’s not like cable is going to lose its quality mantle overnight. But Netflix’s ability to pay top dollar for shows and talent – it agreed to sign showrunner Ryan Murphy to a five-year deal worth $275 million – could make it increasingly difficult for cable and broadcast to compete.    

If the momentum from Bright and Dark continues, and given Netflix’s track record, that is likely, then it turns the whole model on its ear. It used to be that programmers produced content for a specific country expecting only people inside that region to watch it – German-language shows for Germany, French-language programming for France, and so on.

“If Netflix can invest in German content (or French, or Portuguese, or Italian, or Korean, etc.), and derive value from that content globally, that completely changes the ROI equation for investing in local market content,” Juenger wrote. “The return on the investment is no longer calculated based on the number of German subscribers [that] can be attracted and retained by a body of German-language content. The content is now also generating a return across the entire world.”

As of last count, Netflix had about 118 million global customers. Earlier this week  Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak estimated that Netflix could have 250 million international subscribers by 2024.

In a research note, Wlodarczak wrote that Netflix appears to be operating in a “virtuous cycle” – the larger their customer base grows, the more they can spend on content, which grows the base, increases barriers to entry and raises the ability to take future price increases.

“All else being equal with the broader markets, as long as Netflix continues to beat and raise on subscribers we believe the stock will continue to work,” Wlodarczak wrote.

Viacom shares continued to dip Thursday, the second full day after Citigroup media analyst Jason Bazinet downgraded the stock to “sell,” but the drop was less dramatic than in earlier trading.

Viacom shares closed the day down 2% ($1.32 per share), finishing at $66.48 each. It was an improvement over the 7% drop the stock endured Jan. 14 – Falling $4.83 per share to $67.80 each – after Bazinet said he expected the company could be dropped by Dish Network in its next round of carriage negotiations.

Bazinet said he didn’t know when that would happen – he guessed sometime this year – but said there was at least a 50% chance it would come true. He drew on other distributors that have dropped the troubled youth-oriented channels – like Cable One and Suddenlink Communications – which so far have been able to navigate the darkness with manageable subscriber losses.

If Dish does decide to drop the channels, it would be the latest and largest blow to the home of MTV and Comedy Central in what has been an increasingly pugilistic past 12 months. In April, Viacom channels went dark to Phoenix-based Cable One, leaving its 500,000 video subscribers without access to youth-oriented programming like Teen Mom, The Daily Show and SpongeBob Square Pants.  In October, the Viacom networks went dark to Suddenlink Communications' 1.1 million customers.

Dish, with 14 million subscribers, would be the largest distributor to decide not to carry Viacom. While neither side would comment on carriage negotiations, someone familiar with the process said that Viacom’s Dish deal doesn’t expire for at least another year.

Dish has not been shy about allowing networks to go dark – eight Turner networks (including CNN, Adult Swim and Cartoon Network) were lost to the satellite company’s customers for about a month last year before an extension was worked out to get them back on the air through March. The two have since reached a long-term deal for the channels.

Other spats include a 46-hour blackout of Viacom channels in 2004, AMC Networks’ nearly four months of zombie-free darkness in 2012 and others.  

Dish was also locked in a blackout of Fox News Channel and Fox Business Network, but the nearly four-week standoff that has resulted so far in the loss of 90,000 Dish customers, according to Fox officials, was resolved Thursday.

While Dish could be using a potential blackout as a negotiating tactic – much like most cable networks do with distributors – it seems that the Viacom networks would be an important part of the lineup for Dish’s new over-the-top service, dubbed Sling TV. Viacom channels were conspicuously absent from the 12 channels that will initially be part of Sling TV’s introductory $20 per month package.

It should be noted that while Viacom appears to be a popular whipping boy when it comes to carriage negotiations, it secured several deals over the past 12 months representing about 25% of its subscriber base, including agreements with Time Warner Cable and Verizon Communications. During its fiscal fourth quarter conference call with analysts in November, Viacom CEO Philippe Dauman said that the programmer had about 70% of its subscribers were covered by deals that won’t expire for the next three to eight years.

Bazinet also warned that losing Dish could force Viacom into seeking out a deal -- perhaps recombining with its former corporate partner CBS – to secure carriage. In Bazinet’s thinking, distributors would be hard pressed to darken Viacom’s networks if it also meant dropping the CBS broadcast network.

Being acquired by another programmer is also an option, albeit less likely because of the size of a potential deal and Viacom’s own ratings pressures. Bazinet said that a possible suitor could be Discovery Communications, but set the odds of a deal happening at about 10%.

While losing out on Dish’s 14 million subscribers would cut into Viacom’s bottom line – Bazinet estimates it would result in a loss of $704 million in ad revenue and affiliate fees for the programmer – subscriber losses could go both ways. While Cable One said its subscriber losses leveled off after the initial shock of losing Viacom channels wore off, its markets are largely rural, largely conservative and largely older. There’s no telling whether Dish’s subscriber base – a mix of rural and more urban markets nationwide – would react the same way.   

Some have speculated that Dish could be putting forth the idea of dropping the channels to force Viacom to sign on to Sling TV – Viacom already has done deals for Sony’s PlayStation Vue OTT service – it seems a little odd that it would start this fight a year before it had to. Every carriage deal Dish has done so far for Sling TV was done in the normal negotiating cycle, including Turner, Disney, Scripps and A+E Networks. A+E Networks did not make it to the initial lineup of 12 channels, but is expected to show up in later iterations of the product.

“It’s hard to get a deal done outside of a deal cycle,” said one industry executive familiar with the matter.

It also seems odd that Dish would pick a fight with Viacom even as it uses the company’s programming as a marketing tool to lure Cable One and Suddenlink customers to Dish. Dish resellers have regularly used character images from Viacom shows – SpongeBob is particularly popular – in marketing to attract former cable customers to the fold.

Still, stranger things have happened in the world of carriage negotiations. Only time will tell if this gets added to the list.  

In a carriage dispute, Dish subscribers can no longer see Fox News Channel and Fox Business Network.

As is generally the case, both sides, which faced contract expiration at 11:59 p.m. (ET) on Dec. 20, blamed the other for the disconnect.

Typically, when a service disruption occurs it is the programmer that pulls the signal, as the distributor is more than happy to continue to offer the content under the prevailing rate under the extant contract.

However, officials for 21st Century Fox said it was Dish that made the move at about 11:50 p.m. on Saturday night.  

“Fox News Channel did not disconnect Dish.  Rather, Dish prematurely ceased distribution of Fox News in an attempt to intimidate and sway our negotiations,” said Tim Carry, executive vice president FCN and FBN. “It is unfortunate that the millions of Fox News viewers on Dish were used as pawns by their provider.  Hopefully they will vote with their hard earned money and seek another one of our other valued distributors immediately.”

Dish, which earlier in the day reached a renewal with four Comcast SportsNet regional services, offered a different take on the proceedings. The DBS distributor, which has reportedly replaced FNC with Glenn Beck's The Blaze and FBN with CNBC,  said it broached a short-term extension offer, with the intent that negotiations would continue, and it was 21st Century Fox that blocked customer access to the two networks as the “media conglomerate introduced other channels into negotiations, despite those channels not being included in the contract up for renewal.”

“It’s like we’re about to close on a house and the realtor is trying to make us buy a new car as well,” said Warren Schlichting, Dish senior vice president of programming. “Fox blacked out two of its news channels, using them as leverage to triple rates on sports and entertainment channels that are not in this contract.”

Schlichting added: “Dish has had a productive relationship with Fox for many years. We regret the service disruption to our customers, and remain committed to reaching an agreement that promptly returns this content to Dish’s programming lineup.”

Carry expressed disappointment, noting the blackout occurred after nearly two decades of uninterrupted service. “We care deeply about our viewers and hope that they will regain access to the number one cable news channel soon. We will continue to work around the clock to reach an agreement with Dish, as we have done with every other pay-TV provider for 18 years. This is the third time in as many months that Dish customers have suffered through a blackout due to Dish’s intransigence. Dish’s record speaks for itself, and makes its rhetoric about ‘reasonable’ agreements ring hollow.”

Indeed, the scorecard shows that it’s been a very busy few weeks for the nation’s  No. 2 DBS provider. On Dec. 5 at 7 p.m., CBS pulled the signals for owned-and-operated stations in 18 stations during retransmission-contretemps, before restoring them about 12 hours later on that Saturday morning. CBS, which had granted Dish three extensions, also inked a new pact for Showtime Networks and other cable properties.

Last month, Turner Broadcasting System agreed to an extension, which sources say lasts into March, with Dish, an accord that put eight of its pay TV networks -- CNN, Cartoon Network, Adult Swim, truTV, TCM, HLN, CNN en Espanol and Boomerang --  back in front of Dish’s 14 million customers after they went dark on Oct. 20. The Nov. 21 extension also averted a blackout of its flagship TNT and TBS networks.

There also were more peaceful programming notes,  Nexstar Broadcasting,  after granting a third extension, reached a renewal on Dec. 10 with Dish for 60 network affiliated and local stations in 46 markets.

As alluded to above, Dish has also inked a new deal with the NBC Sports Group for four Comcast SportsNet regionals: Mid-Atlantic, Chicago, Bay Area and California. NBC Sports Group afforded the DBS provider an extension on Dec. 2, ahead of the end of their contract that night.

Although the parties reached a deal on Dec. 19, CSN New England, the home of the NBA Boston Celtics, continues to remain dark to Dish customers. The parties have been out of contract there since Aug. 6