Wednesday, September 21, 2011

The Rise & Fall of Netflix?

It's like watching an episode of "The Fall and Rise of Reginald Perrin" without the irony.

A simple summary of that iconic 1970s British television show would tell you it is about a middle management man in midlife crisis who does everything he can to ruin his career and his life, only to end up becoming wildly successful and, therefore, even more miserable.

I don't know if Netflix CEO Reed Hastings ever watched "The Fall and Rise of Reginald Perrin" on Britcom night on PBS back in the eighties, but it seems to me like he's copying straight out of Perrin's playbook. The main difference is Hastings appears to be succeeding at failure.

I've worked for companies that pushed dramatic rate increases at inopportune moments without proper justification. Guess what? Not once in all those instances was it ever received well by the clients. Guess what else? Business declined.

In order to keep the combined DVD-by-mail and internet streaming service we were receiving, Netflix demanded a $6 monthly increase. Okay, $6 is not much money and we could easily afford it. However, all things are relative. That $6 represented a 60% increase from the $10 we had been paying. If all of our monthly expenses were to suddenly increase by 60%, we would have a serious discussion about luxuries versus necessities.

To make matters worse for Netflix, their selection of online movies ready for streaming sucks. No fancy alliteration or silly puns required to describe it. It just sucks. And how could it not?

Let's say you own the rights to a popular movie that has enjoyed a reasonably successful theatrical release and faces the prospect of up to a year of fairly strong DVD and pay-per-viewing sales before falling away into obscurity. Wouldn't you wait until your movie started slipping into obscurity before licensing it out to an online streaming service that can probably offer only a fraction of the residuals realized from those other sources? So long as my movie continued to sell a dozen copies a month through iTunes at $9.99 a download, I would probably choose to hold it back from Netflix.

So, what does that leave for the Netflix streaming customer? Crap that nobody in his right mind would bother spending money on anywhere else. Crap that bombed in the theater or vanished from the collective memory decades ago. Crap that doesn't sell on DVD, or iTunes, or Amazon. Crap so bad pirates don't even bother bootlegging it. Crappity, crap, crap.

Sure, every now and then a gem of a movie rises to the surface, but it only serves as a harsh contrast to the poor quality of all the other choices.

And what does CEO Hastings choose to do in the midst of this PR poop storm he's created? Issue a non-apology apology to all Netflix customers in which he unsuccessfully tries to affect humility while justifying the increased fees and announcing the further separation of the company's two services. Seriously, are they just making this up as they go along?

Taking a Wall Street darling and devaluing it by 50% almost overnight. Publicly forecasting an expected net loss of 600,000 customers over a three-month period. Taking one of the most recognized names in the home movie industry and purposefully disassociating it from the very service that made it a household name.

Reginald Perrin would be proud.




© 2011 Mark Feggeler

2 comments:

  1. Nice post Mark. I agree with the that I think the increase in price for a service we were already being provided with no additional services added on is cruel on the customers. However, I actually like the content on streaming. I don't find it all crap. Yes..some of it is, but I have also found some films out there that would never get the promotion it deserves because big Hollywood types think people only want to see big explosions, three stooges humor, and another always a bridesmaid never a bride romantic comedies. The "blockbuster" movies out there is the real crap. I'd much rather watch a crappy movie filmed with a cast a crew limited in numbers,experience, and funds then the IMAX 3D garbage we are charged $15 to sit through.

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  2. I was more disappointed at the pitiful selection of classic oldies. Where's Bogie? Where's the classic comedies of, well, any decade? Hell, if they had offered me just the academy award winners from the 1930s I probably would have been happy.

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