Earlier this week, Netflix CEO Reed Hastings, recognizing he was in a public relations hole after a recent price increase, doggedly continued to dig deeper by arrogantly "explaining" his past arrogance just before dropping the bomb that the iconic DVD by mail service, along with it's website and billing accounts, would be spun off and given a really stupid name.
Somehow, Hastings managed to shoot himself in the foot even while that very same foot was jammed in his mouth.
"You vill use Kvikster and you vill LIKE it."All this reminds me of a scene from "Monty Python and the Holy Grail," one of the many, MANY movies NOT available for streaming at netflix.com.
In the comedy classic, the "Dead Collector" is pulling a cart door-to-door calling, "Bring out yer dead!" A man brings out his grandfather and places him on the cart, but the sickly old guy protests weakly that he's not yet dead.
Nearly Dead Man: I don't want to go on the cart.
Large Man: Oh, don't be such a baby.
The Dead Collector: I can't take him.
Nearly Dead Man: I feel fine.
Large Man: Oh, do me a favor.
The Dead Collector: I can't.
Large Man: Well, can you hang around for a couple of minutes? He won't be long. Tech pundits on at least one podcast I've listened to liken the separation of the DVD and streaming businesses to housing one's sickly, nearly dead uncle up in the attic out of sight and mind until he expires.
That Netflix is doing this is understandable. DVD's are dying and Netflix wants to concentrate on the business of the future - streaming. DVD's are already under one layer of obsolescence since the advent of Blu-Ray. But the weak market uptake of this newer format makes even Blu-Ray look pretty diseased and arthritic.
Add to that the fact the DVD side of the Netflix business depends heavily on a healthy United States Postal Service. This once rock-solid government entity now can't seem to get through a fiscal year without racking up a multi-billion dollar loss and having to go hat-in-hand it's governmental parents for a bailout. Continued healthy function of the United States Postal Service will almost certainly depend on immediate positive and constructive action by the United States Congress, an institution famously disinclined toward any action not facilitating immediate short term and shortsighted partisan gain.
This seems similar to when Steve Jobs of Apple unilaterally, and somewhat prematurely, declared the floppy disk dead. History did vindicate his view eventually, but floppies still survived (much as DVD's will) a fair amount of time before succumbing to another now-dead storage medium, the Zip disk.
Netflix clearly thinks the DVD is dead, and I tend to agree. Any physical media I buy comes to me only after an exhaustive and fruitless search for any kind of download option. With music, if iTunes or Amazon doesn't have an mP3 or AAC file available, I sigh heavily and grudgingly schlep to Amazon or Best Buy to purchase a shrink-wrapped plastic disc. Once in hand, the disc is then be shoved into my Mac's optical drive for about 4 minutes and, once it's content was slurped into iTunes, the still shiny round coaster, er, disc, is then be tossed into an out-of-the-way drawer where it molders yet today, never since touched by human hands.
The Dead Collector: 'Ere, he says he's not dead.
Netflix CEO Reed Hastings: Yes he is.
The DVD: I'm not.
The Dead Collector: He isn't.
Netflix CEO Reed Hastings: Well, he will be soon, he's very ill.
The DVD: I'm getting better. . .My wife and I have a modest collection of DVD's that has in the last half-decade only grown by a very few "uber favorites," the ones we definitely want available to watch right when the mood strikes us, such as the Christmas favorites "It's a Wonderful Life" and "A Christmas Story," and the Star Wars movies. (And even these few DVD's were purchased used.) For all else, internet streaming or a delivery of a disc by snail mail is more than adequate.
The HUGE downside to this de-integration of the DVD-by-mail/streaming business for both Netflix and it's users is that current search and rating system will now be fragmented, causing the recommendation engine that has surfaced to many great movies I would not have found otherwise to only recommend from the much smaller pool of streaming moves. No longer will I be able to just search for a movie on streaming, and in the all-too-frequent instance that it is not available for streaming, pop it in the DVD queue.
I was really easy-going about the effective rise in the price of the Netflix DVD and streaming package, as it was still several dollars below my "bargain line." But if I now have to deal with two separate entities for DVD's and streaming, especially when one of them has the totally idiotic name of "Qwikster," Netflix MUST expand their streaming options with massive new content deals, and SOON. Otherwise, shedding the DVD business will be a shot squarely in the foot. Once the separation is complete, I will still go to Netflix first for streaming, but instead of staying on the Netflix site to put a DVD in the queue, I will have to leave them to check out other streaming and DVD offerings. There are a few others now, such as iTunes rentals and Amazon prime, and I'm sure the options will grow in the coming months and years. Netflix might have otherwise kept this marketshare longer if DVD's were still were still integral to it's business, thereby giving it more time to become an even more dominant player in streaming.
Maybe Netflix wants to sell the DVD enterprise? If so, why dress it up like a corpse and give it a dippy name?
Perhaps there is an opportunity for a third party to license the Netflix recommendation engine and incorporate it into an aggregator for different DVD and streaming services, similar to what is now done by Boxee.
Whatever happens, all I can say is, "Sorry, Netflix. I'd get that foot looked at by a doctor if I were you. . ."
