The Unbiased Eye

A scientist's commentary on events and culture

Netflix Twists in the Wind

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Dear Reed,

I’m glad you have put our business relationship on such a warm and friendly first-name basis. I want to thank you for your personal note about the recent fiasco at your company.

Your email was a little surprising to me. I woke up around 5 this morning and glanced at my email and saw one from “Reed Hastings, Co-Founder …”

If that wasn’t spam, I don’t know what is. I don’t know anyone named Reed Hastings. I don’t care what he co-founded. I cursed the renewed barrage of spam we’ve been getting recently and started marking it as Junk. The message appeared on the screen for an instant. Wait, this was Netflix — the warm and friendly DVD mailer that just pulled the second half of a bait and switch on its customers.

I laughed. For a minute, I thought this Hastings guy was rescinding the doubling of my Netflix bill. I started reading. It went on and on and on, à la Steve Jobs, apologizing for a public relations gaff over the price hikes.

In case readers don’t know what Netflix did last month, the company ditched its nifty combo deal of one DVD at a time plus streaming for around $10 and replaced it with a clever plan that was exactly the same but cost around $18 a month (all figures after taxes).

Well, Reed, let me reveal the inner workings of the mind of a consumer. I’m sure you had dozens of public relations geniuses running around all weekend trying to find just the right way to minimize the backlash. But, here, without charge, I am giving to you, and all your peers in the executive suites around the country, some insight about why we little people buy one thing and not another.

Two or three years ago, I signed up for the three-at-a time deal at Netflix. We had a blast for a while, watching all sorts of movies that we’d never seen or hadn’t seen in a long time.

But the well ran dry. Our time is short. We work hard and don’t often have long evenings to stare into the TV. We seemed to always have three movies piled up next to the cable box, and the bill was around $18 a month and then over $20, and we only watched one or two a month.

I only have so much money every month and buying one thing means passing on another.

So what’s Netflix worth?

I personally like streaming. I’m willing to give up on a bit of the picture quality for the convenience.

But the trouble with Netflix, the streaming part, the one which will keep the valuable household name, is that the selection is piss poor. I’m sure you are well aware that lots of people think that. I can no longer find anything to stream. It is time-consuming to wade through all the junk. And it can take an hour to wade through your descriptions to find something to try, and usually it isn’t any good. And don’t talk to me about Netflix’s recommender. It’s batting around 20% to 30% for me but I inevitably have seen the good recommendations and only the junk remains. I have a few more TV series to catch up on and then the streaming part is going to be history as well.

Now, I also understand that the streaming selection is not your fault. The movie studios won’t let go. Movie executives and stars and assorted hangers on like to talk about art and beauty, but they are really concerned about money, and the $200 lunches, and designer clothes, and first-class airplane tickets that money can buy. The people in the movie would rather hire 50 lawyers to fence in their intellectual (sic) property than think about how to cope with the future — which is, of course, digital streaming.

The same story goes for the music business, the book business, the news business, but I’ll leave those for another day.

Well, Reed, I write all this with sadness. It wasn’t long ago that I happily rented DVDs from a quirky little video store on the corner. I knew, for real, the first names of all the clerks, and paid $4 or $5 a disc when I wanted to see one. The clerks made recommendations worth more than the million bucks you handed out in the Netflix Competition.

Alas, Blockbuster killed them off. When I went to Blockbuster and asked for a movie, they usually didn’t have it. Then Hollywood moved down the avenue but while they were fighting it out, I gave Netflix a try. Well, you didn’t have everything but you had a lot. Eventually Blockbuster and Hollywood both went away.

That’s the way of business. I fear you’ve had your moment. You had a good idea, but it’s old now. Only your business is caught in the middle. You still make millions, hundreds of them, mailing people DVDs, but it can’t last. To your credit, you know that. Yet, you don’t have a viable streaming business. Maybe adding video games, as you did, to the mix will help, but I fear not. Just maybe your one good idea was only a lucky guess. You might as well take the money and run.

You see, I don’t think Qwikster — which inherits the old DVD business — is going to do any better than Napster or Friendster or any of the other -sters. It’s old. Your fleet of p.r. and advertising geniuses screwed up. Qwikster’s a horrible name.

They made another mistake. In a letter such as the email you sent, you mention AOL and Borders Books. You are only conjuring up your own future.

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Written by theunbiasedeye

September 19, 2011 at 12:36 pm

Posted in Business, Culture

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