Killing the Golden Goose

Having rejoined Netflix a couple of months ago, I have been enjoying hard to find films such as Ugetsu (brilliant film) as well as catching up on hits from the past five years. But I am wondering just how long they are going to be around as a company.

The first sign of problems was the change in fees shortly after I joined, with the ability to stream and have one DVD out going up considerably. I opted for the two DVD only package because most of what I want to see is not available streaming. Also, Starz contract will not be renewed and it appears other studios providing streaming content intend to follow that path.

Most people opted to keep the streaming, believing that is the future of entertainment delivery. But many threw up their hands and quit Netflix outright. Many as in millions of customers. Consequently, the stock tanked when the losses were revealed.

So when the CEO Reed Hastings announces out of the blue that it was a poorly handled change it should be a good thing. right?

Sadly, the buffoon running the show has decided to spin off the DVD operation into a different company, Qwikster. It is clear that Hastings wants the DVD side to die completely, but with the demise of the streaming service likely next year this is incredibly stupid.

I disagree with the analysis in The Atlantic Wire piece. Netflix has the Hollywood studios completely against them with some executives thinking the rental business has hurt theater box office. It has appeared to have damaged DVD sales, though I would argue that poor product has more to do with it. Which is why you don’t see new films streaming and a three month wait after DVD release on the disc side.

This is all fall out of the fanatic intellectual property rights fight which is based on greed and laziness. The sad result is less choice for consumers and no increase in sales of tickets or DVDs.

But the sheer idiocy of thinking the studios will cave on streaming video when they won’t even support their own endeavor, Hulu, is astounding. Even though DVD sales have plummeted, Red Box proves there is a market for renting them.

For rural people like me, renting movies will become nearly impossible once Netflix/Qwikster fold. With iTunes getting rid of rentals and only allowing purchases, things are going to get interesting. But this will make cable and satellite providers happy, since they have been losing people moving to Internet delivery of entertainment.

It dawns on me this is the perfect combination of events to drive up piracy. Oy.