Tuesday, September 20, 2011

Netflix - Red for danger

Earlier this year, when Netflix hiked its prices and everybody complained, I rolled my eyes skyward at how spoiled people were acting. For years and years, customers had gotten quite a lot for next to nothing, so when they were asked to pay a bit more than next to nothing, they cried foul in droves.

I thought, and still think now, that people had lost all sense of perspective. If they were only paying $10 a month for unlimited movies, and then the price become something like $16 a month for unlimited movies, the bargain was STILL amazing. People used to pay a lot more than that per month at the ol' Blockbuster.

But no one remembered that. People cried like babies who'd just had their pacifiers snatched from their mouths. They reminded me of Louis CK's routine "Everything is amazing and nobody's happy." It sounded like people who moaned about the Wi-Fi on an airplane going out, and they forget they're in a chair in the sky. The world doesn't owe you a living, folks.

Now don't get me wrong. I know the economy's tough, and in times such as these, every penny counts. And I understand the principle that hiking your prices during a recession may not be the wisest business  decision in the world.

But remember what I said before about people losing perspective? I think readers should understand mine. You see, I'm not your average Netflix user. I don't flock to the New Release section for 99 percent of my viewing like most people do. I see most new movies I want to see in the theaters. If I had to guess, I'd say that 70 percent of my Netflix is catalog titles and 30 percent is new releases. And even that may be generous.

I go to Netflix to get the titles you can't get at Redbox or at the few brick and mortar places still in business. So for me,  me, paying $23 a month for a virtually unlimited selection of movies, many of which I can watch instantly, is a HELL of a deal. And that's true even if I was paying only $15 before. I'll eat the cost because I love movies.

But it's because I love movies that I find Netflix's response absolutely baffling. Basically, they've split into two companies. Netflix will now be the streaming-only service, and the classic disc by mail business will be spun off into an operation called Qwikster.

 Qwikster? What the hell is that? That name doesn't suggest movies and TV to me. That sounds like a name for someone who dumps flavored powder into milk.

But even more important than the name change is the operations change. Each customer who gets both services will now pay two bills. OK, annoying but not the end of the world. The bigger problem is that the sites will no longer be integrated.

So for example, if I go on Netflix, I see they have Steven Spielberg's first theatrical feature, The Sugarland Express. Oh, no, wait a minute. Like too many movies in the annoying Starz Play category, it's in the wrong aspect ratio. It's cutting off Spielberg's beautifully crafted images. Before I could always say, "No problem, I'll just dunk it in my disc queue." Oh, wait, not anymore. Now I have to jump through another hoop and find it on Qwikster.  Annoying.

Or let's take the flip of that example. Let's say I want to watch  Charge of the Light Brigade, with Errol Flynn and Olivia de Haviland. That was available on Instant. Oh, wait, it's not there anymore. Let's go to Qwikster. Damn, they don't have it anymore either. Now I've gone onto two sites and struck out, doubling my frustration. Guess I'll try my luck with TCM. Oh wait - I was considering dumping cable because I now have a Roku streaming box. THEN what do I do?

Now, I realize that my own argument could still make Louis CK scoff at me, just as I scoffed at others. Fair enough. But it's one thing to pass on the prices of streaming to customers. Regrettable as that is, that's expected. But it's a big mistake to compound that buy making your sites more difficult to use. AND dilute your brand at the same time.

So what's the next step? Since I have that streaming box now, I might keep Netflix and ditch Quixster for Redbox. But then Redbox won't have all those classic titles I like to watch. Gah!

Netflix CEO Reed Hastings is damn lucky I love movies, because that love will probably compel me to keep both of his companies. Other customers haven't been, and won't be so loyal. I may stick around, but I'm disgruntled. I agree with columnist David Poland, who writes that Hasting's email to customers ought to have said this:

“Dear Netflix Customer… we loved being in the DVD business, but it is no longer financially viable… for anyone. We’re as sorry as you are. It is where we have lived all these years and built a great relationship with you, our subscribers. But the simple truth is, we cannot move forward if we live in the financial structure of the past. Shipping and distribution centers and competition from new delivery systems, including our own streaming build-out, have made the great deal we have offered you all these years impossible. And the streaming business can expand to the entire planet… all we have to do is to pay for content rights for each country, which is still remarkably cheap in most places (at least until we raise that bar).

We believe we can sustain a DVD shipping business for a couple of more years and we are going to keep offering that option to you for as long as we can. It will cost you a little more, but there is no bargain like it.

We know the future is streaming. But this is also a very expensive proposition. We are working hard to deliver as much high quality streaming content as possible. If you choose to stream only with us, there will be a lot less product available than you are used to from the DVD-to-you business. But it’s still a better value proposition than any other streaming company in the world. It is our commitment to remain the biggest, best, most easily accessed streaming media company on the planet at an incredibly affordable price of less than $10 month.

Honestly yours,
Reed Hastings”

At least the pill would have been easier to swallow - with or without the Qwik.


Allison M. Dickson said...

See, and I didn't like the price hike because their streaming service is highly imperfect and the content is lacking. And Netflix got to the top dog spot being the cheapest value in town, earning millions of admirers for being super convenient, and affordable. I admired their integrity. But now it seems they're doing everything possible to ruin that, and while I can see a small price increase, they essentially doubled it. What a shit way to do your customers. Nevermind that cable companies are going to be putting the costs of increased streamibg off on to the consumers as well.

But if streaming and disc services were more redundant, I easily would have kept streaming. But it isn't currently worth eight bucks a month. Maybe in the event they can offer more current titles or first-run TV shows like Hulu Plus, or put a consistent standard on things like aspect ratio, I'll change my mind. Until then, I'm without Netflix and now Qwik.

Rob Bernard said...

Unless they have an epihany about how badly they've screwed things up in the next few Weeks I plan to switch back to Blockbuster. I stuck with nf after the price hike because it wasn't worth the effort of maintaining two queues, but if nf is going to force that on me anyway then I might as well go where I can exchange movies instore and don't have a 1 month wait for new discs.

HollyGoKimsy said...

Here's the thing for me. I haven't seen a theatrical release for months and don't miss them at all. I'm currently on disability pay, and am only receiving part of my salary. I have to worry about silly things like my electric bill as opposed to how many movies I can watch on DVD. I have streaming for now, only because I like to stream TV shows. But I may stop that, becuase I can watch those on hulu at my leisure for free. My mom reboxes movies now, and she will share with me or pick me up the newest release. If I have to wait four weeks, sure it's annoying but I can be patient. I've learned that watching a movie just isn't that important to me anymore - I'll find something else to do with my time. I pay too much for cable already - I'm not worried about this. And a 50% price hike IS a big deal - even if its something going from even 5 dollars to 10 dollars. As Allie said, it shows no respect for your customers - especially the way it was done.

Sir Critic said...

Allie: No doubt the streaming service is highly imperfect. The aspect ratio issue is a MAJOR stumbling block. However, I don't agree that the content is lacking. I have 205 titles in my instant queue. Your taste in movies is startlingly similar to mine. If I can find that many titles, I'm willing to bet you can as well.

And Kimberly: I agree that Netflix handled the whole affair badly, and now has compounded their error with this ill-advised splitting. Yes, the economy is bad and price increases are hard for everyone. But I stand firm in believing the price increase itself was not the mistake. Perhaps Netflix could have incurred over time to ease the added expense. But the long-standing cheap price also enabled a lot of laziness in the customer base. Stories abound of people keeping movies for months on end just because the price was $10 every 30 days. I know, I did it a few times myself. But all I and others were doing was decreasing the value of the service. As long as I kept some of those discs, I might as well have bought the damn things. If a higher price will compel people to actually USE Netflix as a rental service rather than a very long term library, I say that's for the better.

Eric Wolters said...

Much like you Eric, my Netflix queue is bursting with titles from the days of yore. Of the 250+ movies that I have lined up, less than 100 are available streaming. I get more bang for my buck from Netflix than anything else that I spend my money on. That's why I didn't really mind the price hike (it wasn't too long ago that we had to shell out five bucks a pop at Blockbuster). But this splitting into two companies business sucks! I currently watch the streaming movies on my laptop, which is convenient, but I'll likely move to Quikster simply to keep the catalog, and sacrifice the streaming altogether. That is, of course, until the streaming library is bulked up and I'm forced to go exclusively that route in the next couple of years anyway. Right now, I'm just not going to maintain two queues. Here's hoping that they will at least let me migrate my current queue to their ridiculously titled new company. Thanks for providing a venue for me to vent about the insane shenanigans of Netflix! Great post!

Allison M. Dickson said...

So what if the low price inspired laziness in the customers? Netflix was benefitting from it by having to ship fewer discs. People don't much appreciate having a corporate nanny, or being called lazy, for that matter. That certainly isn't why Netflix did what they did anyway.

And as far as content, it is certainly lacking in current content that appeals to mainstream viewers. The bulk of my streaming queue was devoted to documentaries and tv shows.

Sir Critic said...

Allie: I think the root of our disagreement here is, I'm taking a more local look at the price increase, while you're taking a more global look.

Perhaps the content is lacking for the average Joe and Jane. But you and I, and commenters like the other Eric, are not the average Joe and Jane. Maybe the streaming content is lacking for other folks, but not for me. My point was, that if I can find lots to see in the streaming catalog, then you should be able to do the same.

Complaining about hiking the prices because the economy is hard is one thing? But complaining because Bridesmaids isn't available to stream and you have to (gasp) WAIT a few days for a disc? That's something else altogether. Sorry the wi-fi didn't work on the plane either.

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