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Netflix fixes the wrong problem

You have to wait for new Netflix DVDs.

Word on the street is that Netflix subscribers are fleeing because of recent rate increases; the company hopes to fix this by splitting its streaming service from the DVD service and making both relatively inexpensive. The streaming service will still be Netfix, and the DVD service will be called Qwickster. You can keep both services without paying more, or if you just want DVD service or just want streaming service, you can keep one and ditch the other, and pay less. This could be a good idea if price were the only problem.

For many, I suspect it’s not. Check out the graphic at the top of this post – it shows the status of new DVD releases I’ve just added to my Netflix queue. Only one is available now. Others have a wait – from short to very long. This never used to happen; now it’s the norm. I can drive a couple of blocks and find a RedBox that has the recent DVD releases I want, or I can wait for some indefinite period for Netflix availability. I’m having to watch and juggle my queue – I have no confidence that the next DVD Netflix sends me will be the one I prioritized ahead of others; it might have a “very long wait.”

If Netflix can’t resolve this supply vs demand issue, more will flee regardless of price.

As for the streaming service, because so few of the films I want to see are available for streaming, it’s not especially attractive. Best thing about it is that I can watch old episodes of “Kolchak: The Night Stalker” whenever I want to. Actually, I currently have more items in my streaming queue than my DVD queue, but they tend to be things I would watch if I had time on my hands, which I generally don’t – not necessarily compelling, and of course no new releases. And this service will only work so long as I have Internet access with unlimited access. If broadband providers cap their services (and I have no doubt they’d like to go there), high-bandwidth streaming of full movies will be potentially expensive. Capped bandwidth could kill Netflix’ streaming service.

Another issue is whether Netflix will be able to sustain contracts with content providers and continue getting all the DVD releases, or continue to get them at release. Consider the loss of Starz content.

We all have limited time for longer form media and many channels for access. I find that I’m increasingly watching movies via HD cable channels, and I can use RedBox for the new releases I’ve been getting from Netflix. There are also competing streaming services, such as Amazon’s, which is free with Amazon Prime. I’m not confident Netflix’ price reduction will bring departing customers back, or prevent existing customers from departing.

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