I’m sure we’ve all gotten the weird e-mail from Reed Hastings by now.
You know, the politician’s apology where you act like you’re all good and sorry when in actuality you made up your mind long ago and don’t really give a shit if some people don’t agree with you.
Yeah – that one…
Honestly, it’s really disappointing for me to see them doing whatever the hell it is that they think they’re doing because I actually really like Netflix as a company and I don’t necessarily want to see them drive their business model into the ground, which is exactly what I think they’re doing with splitting off the DVD rentals to this new company called Quikster.
The logic just doesn’t make sense. They spent the last ten years building the Netflix name with the mail rental service, and now they’re willing to just take all of their eggs and chuck them from one basket to the other because streaming video is the future of media! To me it feels really disingenuine to spend all of that time building a brand, and then want to do the old switcheroo when you’ve got a new product coming out, leaving the old, very successful product with a name that sounds frighteningly like one of those creepy Amway products…
Other reasons that it doesn’t add up:
- Their streaming service kind of sucks. I mean, sure, it technically works and is becoming available on more and more devices all the time, but isn’t everyone always complaining about the selection being trapped in the land before time? I know that’s why we never really used it.
- On top of that, it’s been made quite clear that all of the studios hate Netflix, whether they’re jacking up rates or making them wait a 28-day grace period while they’re happily selling to the other distributors. What’s there to make them feel good about those relationships when companies are coming back to the table wanting 10x the licensing fees that they collected from them last time?!
- Also on the hate wagon … ISPs aren’t really thrilled with Netflix either because they’re such a bandwidth hog and in the situation of cable companies, also cut into their other service offerings. Studies have shown that Netflix ALONE dominates 20% of the Internet traffic in the USA during primetime hours. 20% is alot!
And of course, back to the user experience – why in the world would people get excited about paying more money to now have to access two completely independent systems whether they want to watch movies on demand or via DVD rental?! This is the part that just baffles me the most because it really seemed like Netflix had a perfectly good system going – “Do you want to watch that Instantly or via DVD tomorrow?” … “Sorry, we don’t have that movie available Instantly, but we can have the DVD shipped out to you for tomorrow!” All of that brilliant integration will be completely lost with the new system that has been described.
I think a sign of how out of touch these guys are was a quote that I saw from some Netflix executive that basically said, “We can’t keep offering the DVD service as a $2 add-on to our streaming service…” which is ironic because I always looked at it exactly the opposite way. For me, streaming was the add-on and DVDs by mail were the core product, and frankly, that’s what built the Netflix brand to become the powerhouse that it is today. And the thing is, I think the company could make a huge name for itself in the streaming arena, too – they’re already well on their way to getting there, but bastardizing what got you here in the first place certainly isn’t the way to do it.
That said, this is a company that has rolled back some horrific blunders based on customer feedback in the past, so I suppose there’s still a chance that they might come to their senses and realize the awesome advantage that they have by leveraging streaming and rentals against each other instead of making them competing products from different companies.
Will it actually happen, though? I don’t know, but before then, by god someone needs to teach Reed Hastings how to write an actual apology letter…
