Netlfix "Qwik"ley Drops the Ball
Netflix #Fail

Netlfix "Qwik"ley Drops the Ball

10/11/2011 by Larry Salvatoriello
A look at some of the recent Netflix policy changes, reversals, and fumbles in this new era of streaming media.

About a year ago I wrote a blog about Cloud TV and praised Netflix for paving the way to the future of television. Today I write to say that the good news is Cloud TV is here to stay but Netflix isn't the reason. Netflix has become their own worst enemy and if they are not careful, will lose everything they worked so hard for. On the bright side, 2011 has been filled with new services that makes cloud entertainment even more exciting. Here is a look at Netflix's pending demise and also some of the exciting new things that have come to life since last year.

Netflix Demise

After seeing over a million subscribers walk away and losing half of it's market share since July, Netflix has decided to not spin out its physical disc business to Qwikster as announced via email about 3-4 weeks back. I do not have a clue who Reed Hastings had helping him with his decision making but whoever it is should have their head examined. In July of 2011, they raised their prices, poorly communicated it, and then apologized. In September of 2011, they announced they are spinning off their physical disc business to Qwikster which would require users to manage their subscriptions from two seperate websites and today they announced they are not going through with it. In addition, the product has not gotten any better and their downtime and support are less then stellar. The only thing that they have to keep them above water at this point is the 20,000 plus titles they offer via their streaming product. I was always of the opinion that if Apple got into this market they could put Netflix to bed but until then, they had nothing in their way except themselves. Well they got in their own way. Now even Blockbuster has a heartbeat.

The Rise of the Departed

The Netflix failures brought great opportunity from the competition. The likes of Amazon, Blockbuster, and Hulu are all making strides to gain marketshare. Blockbuster recently signed a streaming deal with the Dish Network that offers streaming content for $10 a month. Unfortunately this is only for Dish Network clients but Blockbuster promises this will be offered to everyone soon enough. Not great but a step in the right direction. Hulu recently announced that the premium subscription service Hulu Plus will soon amount to over half of the company's revenue which by all indications means people like it and are willing to spend the money. Lastly and maybe most importantly, Amazon released the Kindle Fire and is offering their streaming service with it which has over 11,000 titles. In addition, Amazon announced a deal with 20th Century Fox to stream its content. Netflix still has more titles and deals with Dreamworks and the Discovery Networks but its only a matter of time before these companies or another company offers more for less.

For the time being

As mentioned in my blog last year, the combo of iTunes and Netflix was keeping me happy but now I am starting to re-evaluate the entire situation and where I am going to spend those extra dollars for streaming content. I still think Netflix streaming is the best streaming product out there but I am ready to let go of the physical disc service. I will either rent from iTunes or maybe even go to Redbox. Yes, I said it, get in my car and drive to rent a movie. It only costs $1 and that they are everywhere so it's convienent and cheap and as soon as there is a better product that offers streaming and is on all my devices, I will be done with Netflix entirely.

I am still a firm believer that if Apple starts a streaming service like the above mentioned companies, they will win the marketshare but Netflix had such a good thing going that it blows my mind how they could make bad decisions one right after another and possibly ruin it all. At the end of the day, this is all good for the consumer. More competition drives innovation and costs down which is all we could ever ask for. I still don't have the one stop shop for all my entertainment needs but the future (still) looks promising.