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Sep 19, 2011

An Open Letter In (Somewhat) Defense Of Netflix...


Dear Netflix,

I get it.  You're stuck between a rock and a hard place.  On the one hand, you've got your DVD delivery service, a market that you created out of the ether and which has made you a bazillion dollars.  But you're looking to the future and have wisely come to the conclusion that DVDs are yesterday's news and that the future lies in streaming content.  But the streaming infrastructure is still somewhat half-baked.  Not everyone out there has an easy way to stream content to their televisions, and in some areas the bandwidth/picture quality just isn't there yet, leaving you with a few million people who still think they're getting a more convenient/higher quality viewing experience by waiting three days for a red envelope to appear in their collective mailboxes.  And let's not forget all the people who are just intrinsically late adopters and just don't trust streaming content yet.  (These are the same people who still use AOL email addresses.)  On top of all that, you're still having some trouble convincing studios/content providers to really get on board with this whole streaming model, leaving you with a diminished selection of titles and a somewhat crappy profit deal.

At the end of the day, DVDs are going to become the albatross around streaming's neck, so trying to divide the two makes sense, and I was all for offering streaming-only and delivery-only services.  That was a no-brainer.  Was I happy that you bumped up the price tag for those of us who want to continue to partake of both services?  Of course not.  No one likes paying more money without getting more/better service in return.  But it was a fairly marginal price increase, so I was prepared to pay it without argument.  Besides, it's not as if you have any competition worth talking about.  Apparently Blockbuster still exists, although I know of exactly zero human beings who actually use it.  There's talk of owner Dish Network bundling it with their existing service, but Dish is a second-tier name in a market (satellite) that still falls short of cable's numbers in the U.S.

But this morning's news, delivered via an email from Reed Hastings, seems to have driven most people over the edge.  Again, dividing streaming and delivery into separate services is actually understandable, and by re-branding the delivery services as Qwikster, it feels like you're really just making it easier to eventually bring it out onto an ice floe and send it drifting out into the arctic.  You wanna give it a new name?  Fine.  You wanna bill me twice instead of once?  So long as the overall price stays the same, I don't care.  But now I've got to manage two different queues on two different websites?

What the FUCK?

Come on, Netflix.  You've built up so much goodwill over the years.  I've been such a supporter.  Hell, there was about a two year period where I didn't have the extra cash to shell out every month, (and didn't have a ton of time to watch stuff anyway) but didn't want to lose my massive queue, so you were gracious enough to let me indefinitely suspend my service with no penalties.  That was AMAZING, and it ensured that I'd eventually come back to play in your sandbox.  All of a sudden, it feels like the customer experience has become secondary to you; instead, you seem focused only on your balance sheets and internal infrastructure, which is ironic as this shift in attitude as caused your stock to plummet.

In the upcoming movie Moneyball, the character of Red Sox owner John Henry tells Brad Pitt's Billy Beane, "The first one through the wall always gets bloody."  I think that's what you're experiencing right now.  You can see the future of your business model and you're panicking that if you don't start adapt accordingly, you'll become the Myspace of home movies.  You're afraid of getting left behind, so instead you're trying to make a big leap forward, hoping that studios and viewers will come along with you.  So I give you credit for pushing the boundaries, for leading the charge towards simple and seamless streaming content.  Unfortunately, we're all getting charged more (both financially and mentally) in the process, and people are getting understandably pissed about it.  You need an olive branch, and some form of Netflix/Qwikster queue integration would be a nice start.  A cheaper rate for joint users would be a better one.  Your saving grace is that, at the moment, you're still the only game in town...but the more that customers feel like they're being marginalized, the more likely it is that they'll abandon you once some young upstart finds a way to build a better (and possibly) cheaper mousetrap.  At in the future, when physical media has long since gone the way of the dodo, we'll look back and take pity on you, Netflix.

The first one through the wall always gets bloody.

5 comments:

  1. Unfortunately for them, they aren't the only game in town. Blockbuster already has Video Game rentals, doesn't charge extra for BluRay (and is cheaper than Netflix for their 2 and 3 out at a time DVD service). and in the next few days, will announce their streaming service.

    Being that they are now owned by DISH network means they have the backing of a strong company.

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  2. Jared Watterworth9/19/11, 6:02 PM

    I think this is gonna make people see they are not the only game in town. Doing the math, I'd pay less for Hulu Plus, Amazon Prime (giving me free 2 day shipping and streaming service) and occasional Red Box pickups a year then if I stayed with this new model. I cared less about the price increase, this is just stupid. I'll find other separate services that give more for my buck.

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  3. Netflix still has more titles than Blockbuster, and likely will continue to do so for some time, unless a studio decides to jump ship. And while you can probably recreate all the same access with a hodgepodge of other services like hulu and amazon prime, i think most people would rather have a single service, instead of having to jump around constantly to find whatever they want to watch.

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  4. I'm in total agreement with you Daley. In fact, I hadn't thought about how much of a pain this is going to be (and how much less useful it makes my DVD subscription) until you mentioned it. I was on board with upping the price (it's still worth it for me, I get like 80% of my TV/movies from them), and re-branding is just whatever. But why on earth would I want to search Netflix for something, not find it, then go search Qwikster for the same thing? Hopefully the sites won't be as separate as they made it sound.

    If this gets bad, I'll have to make a "classic Netflix" mashup.

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  5. The problem is that it is no longer a single service. You now have two distinct companies providing the same services one company did before.

    No linkage between them at all. They won't even keep the queues joined. I am currently replacing our LG Bluray player with a Samsung and the flexibility of Samsung Apps so I will have options.

    I already heard that DISH subscribers will get Blockbuster streaming for free so I will try that service out as soon as available.

    Not to mention that Blockbuster is not constrained by the 28 day New Release delay that Netflix and Redbox are. From a price point, they are the same when you include BD.

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