Netflix redux

Since I opined about the Netflix split in my last post, I have run across a number of well-written commentaries about this dunderheaded Qwikster move. My favorite was a smart and pointed editorial by Bill Hunt of The Digital Bits, who wrote:

My personal opinion is that it's ill advised. There's still a lot of life in physical media yet - especially on the rental side. There's no shortage of DVD rental subscribers. I also strongly suspect the streaming/downloading future is nowhere near as simple and rosy as adherents wish to believe. Broadband infrastructure upgrades are still way behind here in the States, and Net metering alone could prove a show-stopper to this model. As more and more businesses push cloud services and streaming content, Internet access providers are going to start asking SOMEONE - either those offering the content or those consuming it or both - to pay for the true cost of the bandwidth they're using. That means added and fees for consumers and a LOT of them. Streaming movies might not be so appealing to cash-strapped consumes as the costs to enjoy it continue to rise. The other problem with streaming is that sooner or later, the content providers (read: the Hollywood studios) are going to realize that they don't need Netflix and other content delivery middle men anymore - they can simply create their own streaming services and maximize their own profits.

But Netflix's decision reflects the uncertainty all of the entertainment industry is feeling. As the world of entertainment content continues to go digital and online, and as physical media eventually takes a back seat over the next decade, nobody really knows exactly how much people are willing to pay for such content and how profitable it will be. Yes, people might pay $15 a month for downloading, but no one is going to pay $35.99 for a single movie download. Likewise, while CDs and hardback books once sold for $20 each, most music fans are eschewing albums for $.99 song downloads and most ebooks are $9.99 or less. Plus, Netflix can't exactly be reassured by the fact that the Post Office seems to be having ever growing difficulties and some politicians are actually calling for it to be abolished entirely. Mailing and distributing physical discs requires a LOT of costly infrastructure - tracking software, sorting machines, distribution centers. Yes, streaming requires infrastructure too, but a lot less of it. Which means lower costs. The bottom line is that from a purely business standpoint, Netflix's decision probably makes sense to them - especially in the long run. But in the meantime, a company that's already pissed off its customers en masse multiple times, is apparently happy to piss them off some more and is betting that it won't matter in the long run because they're the biggest player in the streaming/rental business. This is classic corporate arrogance, plain and simple. Maximize profits at all costs - even at the cost of consumer service and convenience.

The bottom line is that while downloading is awesome in many ways, it's not so awesome in others. Quality suffers, content can suffer, and LOTS of jobs are going to be lost. Physical media needs to be authored, manufactured, packaged, shipped and sold in real, physical places by real, physical people. Digital downloads are stored on a server and are sent by computer to your playback device at the click of a button - all by computer with just a very tiny fraction of the human involvement physical products require. If you're a corporate shareholder, that's awesome - pure profit. If you're someone whose job is no longer required, well... maybe not so much. This is the trade off we're making as a society and it seems we're just all going to have to get used to it because it's here to stay. Welcome to the 21st Century, folks!

So the question becomes, what do we do now? I wasn't mad at Netflix so much for the price increase. Handled badly though it was, the cold hard cash always comes streaming out of our pockets when times are tough, whether we like it or not. Netflix could and maybe should have softened the blow by increasing the price gradually, rather than dumping it on everyone all at once. But it's also worth noting that Netflix's long-standing low price enabled a lot of laziness in the customer base.

Stories abound of people keeping discs for weeks or months on end because a lot of people figured "Ah, it's only $10, $15 a month. What the hey." Believe me, I know. I was guilty of this a few times myself. But all I and others were doing was devaluing that incredible bargain we had. As long as I kept a few of those titles, I might as well have BOUGHT the damn things or stuffed a few extra dollars in those red envelopes. If a price increase actually prompts people to turn the discs around faster, everybody gets more value for their money. That's one of the few - and maybe the only benefit of the sticker shock.

All that said, Netflix has enough egg on its face to keep the Easter Bunny hopping for decades. And I rather agree with this EW writer that Netflix is essentially treating its disc-renting customers as second-class citizens. I'm considering dropping Qwikster/Cuckoo for Cocoa Puffs/whatever and sticking with the streaming, especially since I just bought a Roku box. Might even drop cable since I hardly watch anything except TCM.

Still, I would like to have physical discs to fill the gaps in the streaming catalog - especially TCM fare. Forget Blockbuster - I still consider them an evil empire that rightly and justly had its head handed to it on a silver platter in a red envelope. Redbox can help with new releases, but what about that older catalog material I like? I may take EW's suggestion and go with GreenCine, which caters to cinephiles like me. The disadvantage there, I suppose is that GreenCIne doesn't have nearly as many distribution centers as Netflix does, so the turnaround won't be so Qwik - er, fast. Still, I do have a number of titles in my own collection I've not managed to watch yet - not to mention a load of DVD extras I've never checked out.

And speaking of checking out, there's always the good ol' public library, which usually has a pretty good selection of classic fare. After all, the library was my first job. Sometimes it's good to get back to where you once belonged, as a certain fab foursome said.