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.