Indy Film Fest

19Sep/111

How Netflix Got it Wrong…

When I was a new grad, waiting tables to pay bills and wondering if I'd ever find a job, I cut back on every single expense out there. I got haircuts at the salon training school; I ate a LOT of Spaghetti Os; I dreamt of watching cable one day when I'd "made it."

But as hard as my mother tried to convince me to, I would not, under any circumstances, compromise on my 3-disc at a time Netflix habit. It was years before streaming existed, and those three discs - in heavy rotation - were all that kept me entertained on nights I was sure I'd be eating ramen forever.

Today, I'm down to one disc at a time and stream the service on my computer, my TV (via Wii) and my phone (it came in mighty handy one cold winter evening I was stranded on the interstate because of an accident ahead of me).

Some of my DVDs

When it was announced weeks ago that they'd be separating out discs and streaming plans, I griped. How could you charge the same for a streaming library no where near as big (or at least vastly different) from the cavernous reach of the DVD library? But I figured I'd pay the extra (maybe finally cancel the cable I'd since been able to afford) and nothing much would change for me.

Then the bottom dropped out. Shares dropped 8%. One million subscribers dropped the service all together. Reed Hastings sends a "humble" email acknowledging the mistake.

Except that's not at all what the email does. Instead, it's one big "eff you" to customers, saying in no uncertain terms where exactly we stand in the company's priorities: the bottom.

Read on for my take on all that's wrong with this latest "solution"...and once I calm down a bit, we'll see about Netflix alternatives

The new pricing structure was a bitter enough pill to swallow, as mentioned. It signaled the beginning of the end of DVDs via Netflix. Clearly the company was positioning customers to take sides, hedging their bets that a majority would opt for streaming. Me thinks they underestimated the die-hard movie fans who count on their DVD library for those obsure, far-flung titles you used to only be able to get if you knew the video store clerk by name. They also vastly underestimated the power of the pocketbook in this economy, as subscribers saw the extra charges hit and cried mutiny, jumping ship all together rather than choose one service over the other.

Now, though, Hastings announces the creation of a new business for the DVD portion of the service - something called a "Qwikster," whatever that is. At least Netflix makes sense (flicks over the 'net...get it?).

OK, fine - call it something else. Whatever makes it easier on your business cards.

What's that? That's not all? It's not just a new name?

No, this Qwikster thing is a whole new entity. Got a Netflix queue of DVDs? That's awesome. Say goodbye to it. You'll need to create a new account, subscribe to Qwikster and re-create that hundreds-long queue of DVDs if you plan on using the service moving forward. Two logins. Two queues. Two bills. Two headaches.

I predict "Qwikster" will shutter in 18 months. And that's exactly how Hastings wants it. He doesn't care what the customer wants, what the customer has grown accustomed to. He wants to close up DVD shop, fire all the warehouse employees and rake in the profits around all the streaming deals he can make.

And maybe that's not such a bad thing. Maybe for those of us who treated our DVD queues like our own personal Blockbuster, maybe it means the rebirth of local video stores in an independent-record-store kind of way.

The biggest frustration in all of this for a die-hard Netflix fan is where this all stemmed from. What was so broken in the first place that this whole shake-up had to go down? From the customer's perspective, nothing. The pricing change happened out of greed - and no one at Netflix tried to do anything to deflect that impression. Now, the introduction of separate services, the essential don't-let-the-door-hit-ya mentality of the approach, is just a slap in the face.

I wanted to stick up for Netflix in all this - surely, a company that has so revolutionized movie watching, has made it so widely available to so many couldn't possibly be screwing over the very same people who made it so successful.

With this latest development, though, I'm afraid that's just not possible. Like the rest of the news-consuming public, I have no idea what Hastings and team are thinking with this one, and I have a feeling it'll come back to bite 'em.

What do you think? Are you a Netflix subscriber? Will you transition to "Qwikster"? Where will you find your films instead? Leave your thoughts in the comments.

Image Credit: ToastyKen via Flickr.

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  1. love this, lisa & completely agree. when the f-u happens, i won’t switch; i’ll find new alternatives (hey iTunes, time to create a monthly rental service?)!


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