Netflix wild ride…down

There’s an old saying that “Even the wisest person can do stupid things”, another one said that “The road to hell is paved with good intentions”. Both of these cliches are very accurately describing the Netflix actions of the last several months.

I still think that they have a great product (or should i say products) and a brilliant leadership that knows their business better than everyone else. I still believe that the future of Netflix is in the streaming business and in the long term, they are competing on the future of our TV entertainment, what is today dominated by the cable providers will shift to some nimble, agile player like Netflix.

But…

I am not in love with the recent way Netflix is pushing changes and second guessing themselves, and pushing new changes, and second guessing themselves again, and finally revering their previous decisions. Clearly, the How they do the changes is over shadowing What they tried to achieve and ultimately, that was preventing them to make the changes they want and needed to make.

Somewhat wiser to look back at all the mistakes and the turn of events. But I can’t help myself. The final state (for now) is really easy to explain. I can stop wandering why didn’t they do that better…

For example, imagine what-if Netflix were openly informing the public, during their quarterly call, that they are making some gradual strategic changes. They would have explained the nature of the market dynamics, explained that the future looks very promising and they see a potential to disrupt the traditional TV business. That is a business that have not changed since the 60s and is screaming for a change. I am sure the analyst would be happy.

And than, they should approach the consumers with a lot more love in mind. Explaining where they are going, explaining that they are adding new types of content and that over the next few months/years they will gradually de-emphasie  the DVD business and focus and grow the content available in the streaming side.

Immediately they add options for consumers to subscribe just for streaming or just DVD. They added new content in the streaming form HBO and Disney and others. They added new content for DVD in the form of Xbox and Playstation games. And to support that they are changing and in some cases increasing the pricing to be:

  • Streaming only is now $8/Month
  • DVD only is now $8/Month
  • Customers that are buying both get some incentive in the form of reduced price.

Wouldn’t that make sense? Sure it does.

As a customer that reads this, I would say, Oh, that makes sense. Not fun that there is increase in my fees (cause I still need for now both stream and DVD) but I get something back for it (Xbox games) and longer term, if i can stop paying the cables $30/month, adding $6/month to Netflix actually makes sense.

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Author: dave

Consider myself kid in soul and naive by choice. I am interested in people, technology and business and thrive when they all work together. My favorite quote and motto is that “You can fool some people some times but you cant fool all the people all the time” ― Bob Marley

2 thoughts on “Netflix wild ride…down”

  1. I agree with most of what you say in this post. The only part I would be so inclined to disagree with (and this part was more implied on your part, not anything you specifically said) is I think people would – in general – still be upset with Netflix for making any changes. It’s funny because my very first ever blog was here a few months ago as my intro to wordpress (http://spirittsthinkboxer.wordpress.com/2011/07/14/ahh-quit-your-whining-about-netflix/) and it defends Netflix and it’s price increase. I also view the differences in what it offers compared to, as you pointed out, expensive cable companies and other things. Overall, I’m with you. Even with it’s $6 increase Netflix is a better deal. The split dvd and streaming would have been a pain but nothing too unbearable. The overall public will never be completely happy. With anything

    1. I agree with your comment. Consumers will always be unhappy with price increases. Some of them will be publicly complaining, and some will even quit the service. The question is how many will do so and how many will continue as nothing happened. Clearly Netflix did not get it right. Huge amount of complaints, and as the quarterly result show, many have decided that this is too much…

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