I first met Netflix co-founder Reed Hastings in 2001 at a Maxtor event where I was the dinner speaker. He explained then that the company had always intended to deliver movies over the Internet (hence the name Netflix) but was starting with DVDs because the network infrastructure simply wasn’t ready for digital delivery. They’d eventually drop the DVD deliveries, though I think his estimate of when that would happen was around 2007, not 2011 as the company announced this week. That wasn’t his only underestimation, of course. Hastings also underestimated consumer and Wall Street reaction to the boneheaded way Netflix handled a recent pricing change.
Day traders have to love this, but unless you have your retirement tied-up in Netflix stock and were hoping to stop working this week it doesn’t actually matter much. Still, there’s some value in looking at how Netflix handled the recent changes and how they might have handled them better.
Am I the only person who didn’t see the recent Netflix price change as a price change at all? We have a streaming-only subscription so nothing changed for us. As a family with young children, Netflix DVDs would disappear and we’d end up having to pay for them, so it wasn’t a functional service. We mainly use DVDs while traveling in any case, having finally learned that you can return Red Box videos to any kiosk. No cinephiles here unless you count a morbid fascination with Shark Boy and Lava Girl.
Rather than increase the cost for those who want to stream and continue with DVDs, Netflix probably should have announced the Quikster DVD service, offered current users a choice to stay with streaming-only Netflix or move to DVD-only Quikster, then thrown-in a streaming option strictly for Quikster. This would have been clearer and cleaner messaging but you can see how Netflix might have seen that path as being even riskier than simply adding a surcharge for DVDs on the way to an eventual spin-off.
Wall Street is keyed to total subscriber numbers and anything that causes those to stop growing would hurt Netflix shares. So for Hastings the real question was which move would hurt the company and its subscribers less?
Some level of pain was inevitable, because subscribers don’t like change (unless it involves lower prices) and day traders love market uncertainty exacerbated by throngs of angry torch-wielding peasants upset about...DVDs?
Reed Hastings took his best shot and maybe it was the wrong one. To compensate he threw himself under the bus in a blog post which also means nothing. Netflix is continuing to follow a path laid out more than a decade ago. And three months from now none of this will even matter, the peasants and their torches having moved on to the next source of upset.
“throngs of angry torch-wielding peasants upset about…DVDs?”
People aren’t worried about DVDs. They’re worried about content. The only reason all of this Netflix flailing means… well _anything_ to the end users is content availability. The simple fact is that not everything that Netfilx offers is available via. streaming. Is it even up to 50% yet? Even the stuff that is available is available in these weird windows of time and then gone (forever?). That’s not how content is supposed to work, and folks realize that.
Being able to keep the DVD along with the streaming means you get access to the whole library of content. Get what you can’t stream over DVD. The fact that that’s no longer possible with one account (and associated queue) is what’s ticking folks off.
New customers might not be bothered, they’d never know anything different. Current customers have a good reason to be miffed. I had an account with streaming, until they raised the price. I turned off streaming and just get DVDs, because I want all the content. If streaming had had the whole library, it would have gone the other way.
So I guess I’m a Quickster customer now.
Exactly… I cancelled Netflix before this hoopla after realizing that all the good movies were from Starz. Glad I did, because once Starz pulled the plug, all the good content will be gone for good. Hope you like endless supplies of National Lampoon’s Frat House direct-to-DVD classics starring Paris Hilton and other wannabe actors and actresses.
That is to say, all the good streaming movies were from Starz.
Will, how do you stream Starz?
I don’t see it on TiVo, Roku, or my BluRay player.
Though I’m not in front of any at the moment and will have to check when I get home.
You don’t stream Starz directly. Starz licenses its movie collection to Netflix, and you can stream those movies for as long as Starz keeps those movies on Netflix. That deal is set to expire, I believe, Feb 2012 due to Starz pulling out of negotiations with Netflix.
Yes I am still an angry torch weilding and maybe ex-customer. The streaming library has 1/5 the titles of the DVD library. The deal with Starz is soon to be over which means that the streaming library is going to shrink even more. I’m burning through my queue as fast as possible so I can dump the DVDs and redbox/iTunes everything else.
“Yes I am still an angry torch weilding and maybe ex-customer. The streaming library has 1/5 the titles of the DVD library”
I’m Dumbstruck that they didn’t just say, “When all our most popular DVDs are on the streaming service, we’ll switch over.”
If they had the top 250 (most popular) DVDs in Streaming service, that would be good enough. Sounds like a bizarre thing to do, cut off current customers and tell them, “we don’t actually have that movie in Streaming, so… sucks to be you”
The Cheapskate’s Guide To Movie Rentals
1. Rent DVDs for free at your local library, if they don’t have any, use the interlibrary loan program through your library to rent them. As long as the DVDs are not returned late, this is absolutely free.
2. With Netflix streaming, you get wonderful foreign films that are usually very difficult to find locally. I particularly like French and German Films. My husband meanwhile enjoys cheesy sci-fi and our kids like anime.
3. Make popcorn from scratch with real butter and enjoy.
DVDs at the library are not free, they are paid for with tax revenue. In my case they are paid for through that portion of my property taxes that are used to pay for my local county library system.
Of course libraries are supported by taxes. That’s part of what living in a civilized society entails. If you want to take that route, then also incorporate the costs of traveling on a tax payer funded road or highway or walking on a taxpayer funded sidewalk or bike path and the taxpayer costs of various business write-offs and loop holes. If you do that then renting DVDs at a brick and mortar store is even more expensive. Borrowing from a library is cheaper and yes, as long as the DVD is returned on time, there is no cost, i.e., FREE. I don’t mind paying taxes because I appreciate what my taxes do for me.
Just wanted to clarify that not all libraries have free DVDs, some have a small fee and some may not have any at all but there is usually an interlibrary loan program available. Also, I do realize that there is a lot of waste of taxpayer dollars but in my opinion, providing services to taxpayers is not wasteful because taxpayers are getting something beneficial for the money they put in. My opinion of waste is having billions go missing in contractor or subcontractor nightmares overseas or giving tens of billions of dollars every year to countries that are better off then we are or tax loopholes and subsidies that actually encourage the movement of jobs overseas, etc. Just my .02¢
Everyone appreciates what taxes do for themselves. What we don’t appreciate is taxes misallocating the money from productive to nonproductive citizens and paying for stuff no one needs anymore.
Not that it matters much, but our local library has maybe 300 DVDs. Total. Most of them are kids’ movies or documentaries, and maybe 50-60 of them are duplicates. I have to laugh at the suggestion that this collection could possibly take the place of Netflix.
I’ve watched this whole thing with Netflix and just wanted to assign a Twitter hashtag of “#firstworldproblems” to the whole thing. The level of vitriol about this is just silly to me.
Having said all of that, I wonder how much of this is Netflix mismanagement and how much of this is Hollywood screwing with them. Blockbuster just announced a service very similar to this, separating streaming and DVDs. While using Blockbuster is not necessarily a defense Netflix should use (Blockbuster has managed to screw up royally as we all know), I find it more than a passing coincidence that this happened. If there wasn’t some external pressure from content licensers involved, it would have seemed like a brilliant move for Blockbuster to have a combined, one-price-fits-all streaming+DVD service. But after all the furor over what Netflix did, they didn’t go that way – was it because they are dumb (possibly) or because this is the tribute you have to pay to Hollywood (seems probable).
My understanding is this is nearly all Hollywood jacking with them.
A lot of people have an investment in people not being able to watch what they want when they want it, and if you had access to an entire library via Netflix that is what you’d have.
I think more and more of those that own the content out there will be looking for ways to get their content out to the consumer, but it will be with *them* getting the monthly subscription money, not Netflix.
I think more and more of those that own the content out there will be looking for ways to get their content out to the consumer, but it will be with *them* getting the monthly subscription money, not Netflix.
Greg: That sounds bang-on.
Bingo. All the recent vitriol directed at Netflix is completely unjustified. This is all about Hollywood and the media conglomerates deciding that Netflix was getting too powerful, so Netflix must die. They wanted to jack rates for the content they own nearly tenfold in some cases. Netflix just got the mother of all squeezes.
And since 95% of Netflix’s subscribers are dumbasses who can’t be bothered to do a little legwork to learn what’s going on, they blamed Netflix while Hollywood and the media conglomerates laugh and high five, off the radar. Netflix could have told their customers the truth but they can’t afford to piss off Hollywood and the media conglomerates — they need their content. Most Netflix customers are just whining, uninformed crybabies, and Netflix will be the party that suffers for it. This is why we can’t have nice things.
If the Netflix user base was really interested in sending a message, the thing to do would have been to throw their lot in with Netflix even further and then boycott cable TV, network TV, and theatrical movies while sending letters to all the studios telling them exactly what they were doing and why. Hang onto Netflix service and maybe even trade up a tier or two with all the realized savings from cutting the cable cord and avoiding movie theaters. Two successive quarters of big earnings drops for the overly greedy content providers would’ve put a stop to this BS in short order. Instead, Netflix’s user base torched their own team. Way to go, dipsh*ts.
Disclaimer: I am in no way affiliated with any of the parties involved, except that I am a customer of both Netflix and Comcast (limited) cable and I occasionally see new movies in theaters.
The movie cartel had the benefit of hindsight and didn’t want to make the same mistake the music cartel did in creating a monster like the iTunes music store.
Keeping the distribution of video fragmented, until they could establish one where they directly realize the most profit is in their best interest.
As for Netflix, I believe they do have sound reasoning for many of their recent moves, but they’ve completely botched the PR, and damaged their relationship with their customers.
When movie availability is outlawed, only outlaws will have movie availability.
There was some really intelligent blog site that said the reason for piracy is that legal means have become too difficult to use.
Oh, wait, that was here……, thanks as always for great insights, Bob.
Chris – You are wrong about Netflix not deserving the grief we customers have been giving them. No, it isn’t their fault – though I doubt a large percentage of their customers realize it – but they owe us the real explanation, not A) An e-mail telling us they are doing their subscribers a huge favor by raising prices but not improving service; and B) A second e-mail that starts with an apology and ends with their subscribers now having to use two non-integrated sites to accomplish what previously was done quite easily on one site.
Reed is, at best, a weasel. Maybe once, long ago he was an ambitious guy with a dream. And maybe – probably – Hollywood fat cats pissed all over his cornflakes. Too bad. He should educate his subscribers so they know who to be mad at. Apparently all he cares about anymore is turning a profit.
As to the future of movie streaming? Maybe the creators of everything but canned drama, summer blockbusters and seasonal family crap can find a way to unbind themselves from the mainstream and license their content directly to services such as Netflix. Well shit, there goes an idea worthy of Bob’s Start-up Tour. A day late and a few million dollars short I guess.
Not to get all “me too!” with this, but I’m in 100% agreement with Jason!. If streaming was simply another way to get the content that’s available on DVDs (and vice-versa), I probably would’ve swapped my plan over to streaming-only. As it is, I’m willing to wait for content to show up in the mail on DVD, since that’s the only way to get most of Netflix’s current catalog.
I had DVD + Streaming so the price change was a price increase. I ditched Streaming and thought nothing of it. Netflix had changed its pricing structure before and now it had done so again.
I got Hastings’s “apology” email and was baffled. He didn’t seem to be sorry for anything except that people were unhappy. Nothing had changed except this odd split into NetFlix and Qwikster (not Quikster) billing.
Qwikster hits my ears and eyes as unspeakably lame. I’d rather continue to be a NetFlix customer on that account, but I’ll manage somehow as a Qwikster customer.
What I don’t understand is why NetFlix finds it preferable to spin off its DVD operation into a separate company. Are there financial advantages?
I’d read somewhere that Netflix was being pressured by the studios so that netflix would be charge per user subscription for every movie in their streaming catalog, not per download. And since a large number of DVD+Streaming members only used DVD, made sense to spin off all DVD users so that their streaming customer base would be smaller, for the studio charges
Seems to me this froth over … what, $7/month? … portends market instability that could precede a bubble bursting.
2000, anyone?
Why am I ticked off? It’s one thing for an oil company to jam up its customers. “We’re raising prices, reducing quality on everything, and there’s not one thing you can do about it.” I’ve received messages almost exactly like that from electric utilities, ISPs, even city governments. I’ll take it from them because I have to. But to take crap like that from a company that’s an entertainment middleman? NO WAY. I ditched Netflix. Now, instead of watching crappy movies in the evening, I kill idiot teenagers over and over again in Counterstrike: Source. It’s actually a more rewarding activity. You don’t need that much “content” in your life. Redbox and Amazon Streaming exist, use them for your occasional movie fixes. Read more. Take a freaking walk. Join me in CS:S. Don’t consume. Savor and enjoy instead. You’ll save money and have more fun.
The way I see it the problem with streaming is that the content is a hostage to the studios and producers of the content rather than being just a service to distribute published content already available.
If you are dependent on the studios to allow you to stream their content, then they can charge more for it at their pleasure. If you don’t pay up, you can’t use their content for your service. Legally you have no other recourse.
However if you just distribute DVDs then you are not hostage to their demands, since if it isn’t published on DVDs then no one else has it either. That way the studios can’t threaten to charge you more than someone else.
The downside for Netflix as I see it was the postage charges, which they can’t pass on to the consumer without it becoming a negative incentive to their business (just as when I buy from Amazon rather than a local bookstore to avoid local sales tax charges). However with the demise of Blockbuster and other retail rental businesses it actually gives Netflix a niche for distributing a product more efficiently than others.
To me, streaming is a hype not the best service. I buy bargain DVDs these days and figure I’ll have lots of entertainment whenever I want it without having to pay for it again and again like you would with streaming. If a movie or TV show is worth watching again, you might as well own it on DVD or Blue-ray medium for your perpetual use.
If the movie or TV show is only good enough for one viewing, then just watch it for the first and only time on cable once and forget about it. If I really have to watch it eventually, then I’ll wait till it comes on sale at ultra low prices at Best Buy or Amazon later on. So I don’t bother renting or streaming anything.
This is why I haven’t rented a movie in years and don’t use Netflix. This is also probably a reason why the studios are worried about their revenue these days. Eventually, I figure the studios and producers will only release their movies or TV shows electronically and get rid of Blue-ray and DVDs, but unless it’s a lot cheaper than releasing it on those mediums, it won’t work. We’ve gotten used to owning our own copies and don’t like the idea of not having that option.
This is why the Music Industry is having problems, why E-books haven’t taken off and why streaming only for distribution won’t fly.
How does the whole Starz thing fit in? If the Netflix side is loosing a lot of their more current streaming content, what is Netflix going to do get get MORE/BETTER streaming content?
Is this to sell off Qwikster to buy streaming rights, or as I’ve read elsewhere, just to make Netflix more viable to be bought? Once Hulu goes, do the loosers fight over the newly slimmed down Netflix?
In the short term, there will be turbulence. But other analysis I’ve read elsewhere suggests that this is primarily about showing real subscriber numbers to content producers. The numbers were conflated when both DVD subscribers and streaming subscribers were in the pool. Streaming is the game, and it is the future. DVD is a dead format, and Blu-Ray was born dead. Most movies aren’t worth a re-watch, or if they are, aren’t necessarily worth keeping around so you can watch them twice a year. But to make sure we can have access to these things, content producers want to be able to answer very specific questions, like “what is the per-subscriber revenue for this licensing deal?”
And I don’t know, 3 months is a long time. There are bound to be other first-world problems to be angry about. I mean, have you seen what Facebook has done lately?
Netflix streaming is nice and convenient… just flick on the Wii and away we go. However, I still want to keep my DVD service because 90% of what I want to watch, or is in my DVD queue is just not available on their streaming service. I have additional frustration around the fact that titles are suddenly removed from my streaming queue because the licensing ran out or some other annoying reason. So for me, unless they can guarantee they will have the titles available for streaming, it’s pointless for the media I really want to see, and is only handy for casual viewing.
Streaming has improved, but it still isn’t up to DVD quality. You can’t fast forward or rewind as easily. You miss all the DVD extras: commentary, subtitles, featurette, interviews, cast info, etc. I’m a film and video buff so I like those things. I like not tying up my internet connection too.
I’m a little hard of hearing so I like English subtitles — which have the added advantage is that you can fast forward 4x through the boring parts without missing the dialog.
For my purposes, DVD is far and away the superior choice. I’ve accumulated a fair number of my favorites on sale or used. To that extent I can watch what I want when I want. Plus, as many have pointed out, the Streaming catalog is much thinner than Netflix’s DVD offerings.
I imagine Streaming will catch up but that’s going to be a while.
@huxley: “Streaming has improved, but it still isn’t up to DVD quality.”
I’m surprised I haven’t seen more complaints about this. I have pretty fast cable Internet (can sustain over 8Mb/s, has no trouble peaking over 12Mb/s on sites that can support that), and still my wife refuses to watch feature films on streaming because the video quality just isn’t very good. Our streaming use is mostly limited to animation, which is usually visually simple enough that it doesn’t have problems with the compression, and feature films we get on DVD. Between quality limitations and selection limitations, I’ve been surprised that Netflix has as many streaming only customers as they do.
I blogged about this Monday evening (markdbeasley dot com), and agree with several of the folks here; the issue isn’t so much the price of the service, but the lack of good content via streaming.
End users who want both good content and convenience are paying more to get the same access to the same content as before. In a few months the streaming service will lose its content deal with Starz, and will lose most of its inherent value proposition as a consequence.
It just doesn’t make good business sense to split these services when one has peaked (DVDs), and the other (streaming) is in danger of being abandoned by users who want better quality, yet are highly likely to get worse quality in the near future.
I respectfully disagree with Bob, this issue will not be forgotten by subscribers unless NetFlix can strike some good deals, fast, with content owners.
The plan I’m subscribed to is the complete opposite. I pay $5/mo for up to two discs/mo; I think it’s the most minimal plan they offer (if they even still offer it). I’m also permitted to view up to one streamed movie per month (as long as it’s less than two hours).
I don’t know if the streaming is just an upsell tactic (it surely is at-least that), or if it’s officially part of my plan. Either way, it doesn’t get used a whole lot. As it is, I barely watch one disc per month.
Yes, Netflix makes money off of me (maybe). At $5/mo, I’m okay with that.
However, the point of me telling you all this is to contrast it with the fact that I never received any email informing me of the new pricing plans, or the service bifurcation. I’ve been keeping up with the news on this issue, so I was puzzled when everyone I know got the email but me (yes, I checked my spam folder).
I’ll be watching my credit-card statement with interest to see if anything changes. If they start to charge me for the streaming that I never use, then I’ll cancel that. But as long as the DVD service (now Quickster) remains at the current price, I pan to remain subscribed, until they can no longer support the revenue drain and sell it to some poor sucker who thinks they can make money from it. 🙂
oops: s/pan/plan/
I also have not heard from NETFLIX by email about this
I don’t use Netflix, but does the possible meltdown of the USPS play any role in this?
“The next source of upset”
which would be facebook’s recent front page changes…
Robert, you’re everywhere, everywhen. I don’t know whether you’re just Forrest Gump or, that you ’round’ your experience in your favor, a la your Stanford claim.
We’re all forgetting the old pre-streaming Netflix service:
* One DVD at a time ($9.99/month)
* Two DVDs at a time ($14.99/month)
* Three DVDs at a time. ($19.99/month)
I wonder many customers dropped their level of service from three DVDs per month to one with streaming when unlimited streaming came out? After all, if I can watch a good portion of stuff streaming, I don’t need three DVDs at a time. I’ll just use the DVD service for the movies I can’t get with streaming.
Netflix blew it. They should have removed the two lower tiers of their service and lowered the price of 3 DVDs at a time:
* Streaming only: $8.99 per month
* DVD only special one at a time service: $8.99 per month
* Three DVDs at a time: $16.99 per month.
This way, they could have presented this as a price simplification scheme and as a price reduction. After all, you’re now saving $2 per month on the three DVD at a time service! Most of their customers would have simply taken the three DVDs at a time service without too much grumbling.
Yes, the DVD is dying, but there was no reason to sneak into its bedroom in the middle of the night and suffocate it with a pillow. In a year or two, with more built in Netflix TVs and more streaming content, almost all of Netflix’s customers would have on their own moved to the streaming only plan.
By the way, did Netflix do any research on Qwickster before they decide on the name? https://www.youtube.com/watch?v=RXCj114yDWo.
What about BluRay? For sure, there’s not as much streaming content available as on DVD, but I love BluRays and movies in great HD and don’t want to buy BluRay discs and most local rental stores and Redbox don’t carry them.
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Your random trolling intrigues me, I’ll have two thanks..
as for netflix loving it for older movies, TV shows and kids stuff, anything new i hire from the itunes store, much better quality.
Wouldn’t it be awesome if Netflix could somehow combine their DVD service and streaming service into one product with only one queue and one monthly bill?
I surprised no one mentioned Zediva yet. If they win the law suit, then it is a whole new ball game. I wouldn’t be surprised if Netflix wouldn’t try to slip them some money to keep the lawsuit going.
https://www.reuters.com/article/2011/08/02/idUS317363613120110802
What Zediva is doing is ridiculous from a technical point of view, but it is a clever way to get around the copyright laws.
Zediva has a huge DVD server farm and if there is a copy of the movie that no one is watching they will stream it to you. Sort of like RedBox except they can rent the same movie several times a day.
Nobody has adressed the value public perception (good will). Until a month ago, Netflix was in the rarified perceptual pantheon with Apple and Google and REM, franchises that require years of cultivation and ridiculous luck to acquire.
In one incredibly awkward lurch, they have transformed from an all-amercan darling into evil soul-sucking darth derivative. The stockholders should be apoplectic. There is no precedent for such inept squandering of positive intangibles
Our entire extended family of nascent adopters has washed our hands of Netfux.
It will cost your stockholders years of income stream to buy back our loyalty.
Adios greedy idiots.
Next?
Xactly!
Entirely lost track of how many families I evangelized to startup Netflix for free.
What a criminal waste of good will.
If I owned stock, I would be hiring assasins.
What happens when stock option billionaires entirely lose touch with human reality.
The tragic narrative of our time.
Who needs Chinese villain with these idiots among us?
If you cut yourself, it will usually heal. If you cut yourself in shark-infested waters, you are for certain someone’s lunch. Netflix is now someone’s lunch.
1) Physical media is superior to streaming in terms of picture quality, this will change on the next few years but for right now (2011) nothing beats a disk – Blu Ray or Standard Def.
2) Steaming library offers 30-40% of what the disk library is, physical media wins this one as well. Again this will change but for now it’s not there.
3) Netflix was offering streaming for free,which caused most people to put no value on its true cost, “Doesn’t look as good, doesn’t have the same selection but hey it’s free” By going from $0 to 8$ in one move – totally misread the market. To think he had 10 years to plan this, really blew by being greedy and impatient.
4) After the price increase fiasco they announce a spin off company to make those that do both twice as hard, really shooting the other foot. Almost comical at how bad this was executed.
Reed killed the brand in 2 months. They would have owned the streaming market – and did – and could have slowly phased out the much more costly disk operation. Instead the perception with Wall Street and consumers is bad move motivated by greed. 10 years of quite good will all up in smoke.
After reading the article below, it seems that Netflix is put in a strange predicament in that the bigger it gets, the more it gets financially punished by the studios. Economies of scale usually work to make things cheaper in the long run as a company grows, but in Netflix’s case, it seems to be the opposite as studio executives charge more and more the bigger netflix gets. This may be one reason for the DVD split, i.e., to show studios a clearer picture of the quantity of streaming content subscribers. There has to be a better way because at some point, this will be unsustainable.
https://www.hollywoodreporter.com/news/hollywood-execs-privately-netflix-71957
Here is the assumption: The convenience of delivery of a product is worth as much or more than the product itself. If you assume this you will lose in every market whether we are talking about media, manufacturing or anything else. And yet, this is the brilliant idea used by many management teams across America. This idea is crap. It does not work. Most people don’t really pay attention which allows corporate management teams to temporarily get away with it. They then conclude it worked. Eventually the consumer wakes up changes their behavior to compensate and the corporate management teams are always “shocked” by the resulting shift. Rinse, Repeat.
The reality is that IF Netflix had a the same library on streaming and DVD, no one would care about this price change or the splitting of services because the value would clearly be there. It is not. So from a users point of view, why would they pay double for the same value? No business would ever entertain that idea, and I find it hilarious that the Netflix would be shocked by that stance.
I will throw a bone to business management teams of America. The difference between the “business customer” and the “home user” is where they happen to be at the time. The logic they use at work will eventually follow them home. You have “fixed overhead” at home too. Warning: the previous was a statement of the obvious.
In this economy the number of people who would be indifferent to price increases is far less that those who would object. So its no surprise that those who “make the big bucks” don’t care, while those who live paycheck to paycheck would be offended.
What’s truly ironic is that Netflix is increasingly a the mercy of the Hollywood studios who clearly don’t want to do business with them. The management team approach I described above is the one the studios use. When Netflix used it they got heat for it.
So here is the question: Why would Netflix take a bullet (so to speak) for Hollywood only to have them throw Netflix under a bus?
At least in my house the teens were worse at losing movies then they were as young children, so like you I happily dropped the DVD portion to reduce my cost and keep streaming only.
I’ve been a NetFlix subsriber for 4 years. I was surprised that unlimited video straming was provided for free with my DVD subscription. As a Product Manager, I never understood their product positioning or pricing. It just seemed very odd and illogical. I assumed that NetFlix would eventualy charge extra for video streaming. I guess I was caught off guard by the size of the price increase and found their explanation of what was taking place as even more confusing than their original product positioning.
I assumed that NetFlix is somewhat disorganized with their product planning – perhaps because things beyond their control are changing. As far as I can tell, none of the current large producers of video content want to sell their products to other companies – they want to do the streaming in such a way that they control the process and the profits (obviously that is logical).
I thought Steve Jobs might be able to somehow bring some consolidation to the situation – but, obviously that is not going to happen.
I’m a netflix customer and I wouldn’t have even heard of this if I didn’t check this blog once a month. Who reads email from their “junk” mailbox?
So now I find the apology letter. He starts off apologizing without even an introductory paragraph saying what happened. This is the CEO of a major corporation and he can’t structure a simple email so it makes sense. What a dunce. Unfit for leadership. Who cares anyway? Let the shareholders and board roast him for gross incompetence.
Most of us would agree that streaming video over the Internet is a great idea, but I suspect the media companies don’t ! They will jealously look on as companies like Netflix lead the way and then try to kill them with their own replacements.
Streaming short video clips, great idea. Streeming long TV shows and movies, bad idea, until they solve the bandwidth and bufferbloat problems.
I also do not understand the vitriol about the price hikes. Any sane person could see that unlimited streami plus DVDs by mail was way too cheap. I suspect another shoe will drop in a year or so. Simply put Netflix will NEVER have a good selection to stream at it’s current prices.
Given that a cable subscription with a reasonable selection of movies costs $70-100 a month (ie including one of Starz, HBO or Showtime), it is ridiculous to think that Hollywood will allow Netflix to sell anything comparable for $8 a month. Hollywood will do everything in their power to preserve the income they get from cable tv (probably $30 per month of the $70-100). If you want good tv and movies on Netflix expect to pay $30 a month plus Netflix’s margin. Given the outcry now god knows what the response would be to an increase to $35 a month for Neflix streaming.
Or maybe Apple will target the higher quality and higher cost segment. I’d be happy to pay $40 instead of $100 a month, and get rid of the bundles, awful customer service, ‘renting’ boxes, and other crap of the cable company. And Apple will presumably be happy to leave the cheapskates for Netflix.
Acrylics, especially in a wash, dry thoroughly within minutes.
Wonderful blog! I definitely love how it’s easy on my eyes and also the data are well written. I am wondering how I might be notified whenever a new post has been made. I have subscribed to your rss feed which need to do the trick! Have a nice day
Thanks to 1) The Netflix plan change, and 2) Comcast’s ridiculously high prices for video on cable access, I now use A) Amazon Prime Instant video ($79.95/year), B) Hulu Plus ($7.95/month) and C) Netflix streaming ($7.95 a month). Through Amazon Prime I have rediscovered Red Dwarf. Hulu Plus gave me access to the original SKINS, The Daily Show, Colbert Report, GLEE, and other television shows. I also have one TV with a DTV converter and outside antenna for local news, weather, PBS, and a very good all-movies channel with great movies from the 50s, 60s, 70s, and 80s. I don’t watch Netflix that much anymore, and I am likely to drop it soon. And I also visit my local Red Boxes a few times a month. So, for about $15/month (once I drop Netflix) I have plenty of entertainment which I can watch from my TVs (using Roku), and my laptop, netbook, and my wife’s desktop (Netflix won’t let me access its service from my computers, which are all Linux powered – but Hulu Plus and Amazon Prime do … one more reason to give Netflix the ol’ Heave-ho).
Folks, the times, they are a changin’
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