July 18, 2011

Netflix flak

I got on the Netflix bandwagon almost six years go, abandoning GreenCine mostly because the latter's sole distribution center made the turn-around times interminably long. Netflix had that fabled "long tail" (meaning: lots of anime titles), low prices, and a two-day turn-around.

Now it only has the last (thanks to a distribution center in Salt Lake City), and one out of three ain't good. Netflix seems to have adopted the technological Peter Principle: the penchant to keep "improving" a product until it's useless.

As both Lance Ulanoff and Bill Wyman have pointed out, Netflix is at the mercy of an industry still running on empty when it comes to "protecting" intellectual IP. As Wyman puts it, living out the sad remake of a old script "very similar to the one the music industry just acted out."

But now Netflix has taken that weak hand, shown its cards, and bet the house.

I started losing confidence when most of the new anime titles were only available streaming. There's a lot not to like about DVDs, starting with the Neanderthals who apparently use them as coasters. So I might have sprung for a converter box--except that every single title is dubbed.

It's like going back twenty-five years to the VHS selection at Blockbuster: a smattering of random titles, incomplete series, and only available as lousy dubs. Not to mention their still-lousy search engine and DVDs that disappear from the listings for months on end. This is an improvement?

For the time being, I've switched to the cheapest, two-a-month plan. Between TV Japan and my own DVD library, Netflix isn't worth a premium price. If I suddenly had tons of un-wasted time on my hands, there are several specialty anime DVD rental outfits that would get my business instead.

I don't understand people who pay for premium cable channels either, but Netflix may succeed for the same reason: make the incremental costs low enough that subscribers blithely fork over the money without doing any kind of cost-benefit analysis.

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# posted by Blogger Kate Woodbury
7/18/2011 5:52 PM   
I dropped streaming as soon as the option came available (it actually won't go into effect until August). I'm on 3-at-a-time at a cost that is lower than mail + streaming but one dollar higher than just mail was before streaming came along.

Streaming to me is pointless. I don't like watching movies on my computer, so I'd have to have cables running across my apartment to hook the computer to the TV. There are very few things on streaming that I want to watch, so I would be watching them because they are there, not because I wanted to (which is EXACTLY why I don't have cable). And streaming is unreliable. For about two seconds last year, I contemplated getting streaming just so I could watch Coach, Seasons 4+ BUT, lo and behold, Coach is no longer available on streaming!

But then I'm about five to ten years behind everyone else. And unrepentent about it! Sometime within the next six months, I'm going to need to replace my 24" TV. So, sure, I'm going to get a flat-screen, just for the ease of use. I was at Walmart today, and flat-screens are something like $300 bucks. I practically fell down in the aisle. Wow! Wait long enough and everything gets cheaper. (I have zero desire to have a home entertainment center though. This flat-screen will NOT be mounted on a wall. That's just silly in a small apartment.)
# posted by Anonymous Dan
7/19/2011 1:14 PM   
The cap rate on the streaming contracts is the most important things I've read on the Netflix's relationship with its suppliers. It explains how Netflix was able to get low pricing for streaming content but also why the availability of streaming content has become unpredictable.

The irony of any business that succeeds on the long tail is that the business can only grow so large before it is no longer viable. At the end of the day Netflix is simply a distributor of media lacking any monopolistic advantages. If Netflix management is smart and lucky the business can remain profitable but I see it likely going the route of AOL.