Insight Into Netflix

Marc Randolph has some insight to why Netflix is doing what it’s doing right now, based on decisions that were made when he was CEO:

Most importantly, by trying to run a business that did two things well, we inevitably were forced to make an endless series of compromises that resulted in us doing neither of them well. Our landing page and sign up flow had to accommodate two different paths. Our checkout process needed to handle two types of transactions. Our shipping process had to accommodate two different types of products (one that had to come back and one that didn’t). Our content system had to accommodate titles we could only rent, ones we could only sell, and ones where we could do both.

In hindsight, it seems like such an obvious decision to stop selling and focus on renting. But wow – for a young CEO like myself — turning away from the source of 95% of our revenue was just about the hardest thing I had ever done.

Goodbye, Netflix DVDs

I’ve subscribed to Netflix for a number of years. It’s been great getting DVDs delivered right to the house. I’m one of those subscribers that Netflix made some money on, since I kept those DVDs much too long. I know, I know, I shouldn’t have done that, it defeats the purpose…. yeah, yeah yeah. I liked the service. I liked getting the DVDs right to the house. Very easy.

We use the streaming portion of the Netflix subscription all the time. From the Roku, computer, phone… we use it all the time. It’s great.

The subscription hike that Netflix announced to subscribers in July changed that. The plan went from $9.99 for unlimited streaming and unlimited DVDs to $15.98 for the same thing starting today. At $2 a month, forgetting to drop the discs in the mail… well, I can live with that. But bump that up another $6, and that Redbox around the corner starts to look good for first run movies.

So I made the switch.

The big downside to all this is the old catalog of movies Netflix has, but that aren’t on streaming, all go away for us, at least on Netflix.

What’s the alternative? If you have Amazon Prime, you might not realize it, but you’ve got a free streaming movie service there as part of your subscription. In fact, if you do have Amazon Prime, you might be tempted to drop Netflix altogether.

I’m not sure I’d do that, simply because the Netflix streaming library is a lot bigger. At least it has more things that I like to watch. But it has to get a lot bigger, and it has to start to have first run movies if they’re going to keep their subscriber base.

But what about the old movies? The kids have been wanting to watching the original Planet of the Apes, but since Netflix had a huge wait for that movie (since a new Ape movie came out this summer), we missed out on that. Amazon to the rescue on that one. I can rent it for $2.99 for a night… still cheaper than continuing that Netflix subscription.

I don’t like it, but I “get” why Netflix is doing this. They want to transition people from DVDs to straight streaming, because the longer they wait to do it, the harder it will be for them to make that transition. I just think they’re doing this much to soon.

So, Redbox, you’re getting my business. I like being able to rent DVDs in one town, give it to the family riding along in the back, and letting them watch on the way back home. I like being able to drop those off in my home town. I like that I can rent movies for $1 a night, reserve them on my phone ahead of time and just pick them up. And for the $7 a month I’ll be saving by not going to the higher priced Netflix subscription, in the long run I’ll save month. No more discs sitting around for 2 months without being returned.

Yup, that’s what it took for me to stop being lazy. Jack up the prices.

Netflix… it was fun getting those discs while it lasted.

One more thing: If you’ve never seen Planet of the Apes, don’t look at the DVD cover for the movie. Some absolute moron put the big “surprise” of the movie right on the cover. What an idiot.

Josh Holloway Joins Mission Impossible 4 Cast

Josh Holloway, (Sawyer, to you LOST fans) has joined the cast of Mission Impossible 4. The movie should be out in December 2011.

From the Twitter Stream, Damon Lindelof comments: ‘Okay. Because you asked. Sawyer nicknames for Tom Cruise in MI:4: “Hoppy,” “Prince Charming” and last but not least, “Intenso.”‘

(Via The Hollywood Reporter and DamonLindelof on Twitter)