MSM|September 5, 2011| Author: Steven Hodson|Tags: , ,

All you Netflix whiners need to STHU. Seriously.

There is a war going on right now and while it might not be bloody or leaving bodies strewn all over the place it is a nasty war and you my friend are the frontline troopers.

It is a war of attrition and big money. It is war that has only just started and already the battle lines are being blurred with corporate greed and misinformation, and above all our own greed in getting every thing that we can for free, or at least as cheap as is possible even if that means we could be shooting ourselves in the proverbial foot.

The war I am referring to is the one between the old guard entertainment media companies; like television networks, cable companies, movie companies and the music industry, and the new Internet versions of those companies such as Netflix, the hapless Hulu, music services like Pandora and Spotify, and other video and music streaming services that seem to be launching every day.

As per usual this is a war over who is making money off of us, the consumer.

For the old guard it is about creating an illusion of scarcity of their products and about controlling every aspect of the entertainment pipeline. For the new media companies it is about letting you choose what you want to watch, or listen to, when you watch, and where you watch it. It is also about being able to break down the walls of ownership; or at least it would like to be about that as well.

At the frontlines of this war is Netflix as they attempt to bring about one of the biggest changes ever seen in the entertainment industry. However they are not only having to fight an old guard that is doing everything that it possibly can to protect their archaic business model and their control over the business, but Netflix is also having to deal with the ingratitude of those they are trying to help.

The fact is that  we are acting more like Brutus than a willing participant to a media revolution.

This was most recently made obvious when Netflix announced a change to their pricing model that saw the company splitting their DVD mail service and their streaming service, and then charging $15.98 per month if you wanted both services. From the uproar that followed you would have thought you had take our favorite blankie or pacifier away from us.

Every where you read about people screaming how Netflix was ripping them off and how they were going to give the company the royal finger while killing off their subscriptions. Now I should point out that I live in Canada and as such we only just recently got Netflix here, albeit a rather gutted version compared to the US, for which we pay $7.99 per month for a service that has been severely crippled by Canadian laws and media companies that wanted exorbitant amounts of money in exchange for streaming rights.

In contrast to many pundits in Canada I gladly pay my money each month because I already get immense value for that paltry $7.99 per month (or 26¢ per day); but there is a much more important factor here which seems to be escaping all these childish whiners.

Let’s look at who is the enemy here. Really, think about it for a moment. Here we have a conglomerate of entertainment companies who are making billions of dollars a year and who are scrambling to hold on to their cash cows by any method possible. It doesn’t matter what the consumer wants because that isn’t in the interest of their bottom lines, it isn’t in the interest of their being able to control the marketplace.

When Netflix first started out it was just a DVD mailing company and no threat to the old media companies but then it saw a shift coming in the way that we the consumers wanted to consume our media. No longer did we want to watch television on a schedule set by the networks. We didn’t want to be overcharged through the rectum to watch generally crappy movies in an environment that seemed more like being stuck in a dungeon than an enjoyable viewing experience. Neither did we want to be wallet raped for music that was 99% garbage.

Thankfully Netflix was smart enough to see where the consuming future was headed and they started building out a platform that is both a threat to the established entertainment business and extremely easy for the consumer to use. The moment that they threw that streaming switch however, they became a giant threat to the entertainment companies.

And remember, video streaming is the future, a future that might be being held hostage by the carriers with their caps and the entertainment companies and their outrageous streaming rights fees but a future that is coming at us like a steamroller with no brakes. So it was no surprise that company that had built itself around being agile and always looking to the future would at some point come to question its need for old media DVDs.

At some point it was inevitable that Netflix would start the process of weaning us off of those DVDs and moving to a pure streaming video company, unfortunately it has happened faster than the consumer is able to handle hence the ridiculous outrage over Netflix’s move to separate the two types of business.

Here’s the thing though. The future is coming, and it’s coming fast but in the process the old media companies are fighting for survival which means that they will do anything that they can to delay that future. This is why you get moves like Starz pulling out of negotiation with Netflix for a new contract for their content to be streamed on Netflix. The thing is that it isn’t like the deal being offered by Netflix wasn’t a good one, like $300 million per year to carry the Starz content, but the fact that it wasn’t enough money.

What Starz wanted, and I imagine this will also become another negotiation point for other old media entertainment companies, is that they wanted Netflix to set up a tiered pricing system that would see Starz content charged more for. Thank goodness for us the consumer Netflix said go screw yourself and walked away. Now Starz is potentially in negotiations with Amazon, and you can probably bet those discussions will include this tiered pricing idea, which leaves one wondering if Amazon will agree and thereby laying the groundwork for future screwing of the the consumer; and protecting the old media companies a little longer.

The fact that Netflix was willing to walk away from this is the best thing that could have happened for the consumer but instead of thanking Netflix we are all stomping our feet like whiny little kids. Whining over the fact that we will now have to pay 53¢ a day because we want to hang on to a dying media format that a very large percentage of people don’t even watch when it shows up in their mailbox via USPS, another business that is in the verge of totally collapsing.

We stand there flailing our arms about how rotten Netflix is and telling all our friends how the company is ripping us all off when in fact we should be doing everything w can to get more and more people to subscribe to the service. Instead of pulling our less than a Starbuck’s coffee a day from the service we should be thanking the company for taking a strong stance on something that is a benefit to the consumer.

Sure it might be self-serving but Netflix is our best warrior on this new battlefield. It is a company that is working hard to bring us the best in entertainment at a price that is absolutely ridiculous in how cheap it is and it is doing this in the face of opposing forces that will keep going until the last conglomerate dies off.

We should be giving Netflix the thumbs up instead of a knife in the back.

  • Wonderfully put! I am not cancelling with Netflix – I still love ’em and all the enjoyment they provide us. Its mucho cheaper than having to deal with a theater at any time.

  • Steve, this is a great article, and you do a good job of explaining why we should be embracing Netflix instead of vilifying them. I haven’t cancelled my subscription because my kids love their service and it cuts down on the number of DVDs we purchase. If Netflix keeps me from purchasing one DVD a month it’s already paid for itself and more. I look forward to reading more articles from you.

  • Fabulous article, Steven. Perfectly stated. There’s no way we’re cancelling our account…even if it went to 20 or 25 bucks, it would still be worth it for all the enjoyment it provides us without the hassle of buying/renting/theatre etc.

  • Pingback: The flap over Netflix 'supposedly' restricting simultaneous streaming shows how ludicrous tech blogging can be()

  • Pingback: Netflix makes a smart move and nobody gets it()

  • Wm

    If Netflix was serious, then they would have explained it the way you did. I’ve cancelled my service because of the way they handled it… and if your reasoning was truly the case, then they lied to us and don’t deserve our business, period.

  • Alex

    Great read! Thanks