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.
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.