An Open Letter to Netflix

Dear Netflix,

You’ve gotten some bad press over the past few days.  First, everyone hated your new plan structure and pricing, and then Starz confirmed that you weren’t going to be able to stream their library of movies anymore.  That’s a tough couple of days.

I’m writing you, however, because I’m optimistic.  I truly want you to succeed, but probably not for the reasons you think.  I want you to succeed because of your technology.  You have constructed a streaming video service that is ubiquitous.  It’s everywhere.  My Xbox 360, my Wii, my Roku boxes, my mobile phone, my laptop.  And the list is certainly growing.  You’re not really a “brand” to me so much as you are the portal to the content I want to watch.*

*That is, the stuff I want to watch that you also have a contract to stream.

And there’s the rub.  Being a Netflix subscriber means that I’m glaringly aware of the fact that content will constantly come and go.  It means attempting to stay aware of the relationships you’ve built with specific studios, as well as the expiration dates of those relationships.  I don’t want to do that.  I want to pay you a reasonable fee (we’ll get to that), and I want to know that I have access to new content when it’s available.

I really don’t want to subscribe to HuluPlus also.  But that’s where the new TV shows are.  Well, SOME of the new TV shows.  And HBO?  Oh, that’s a third place.  What about channels like HGTV, Discovery, or Nickelodeon?  Yep, can’t get those anywhere except with a cable subscription.

Now, at $7.99 a month for streaming what you have, I’ve got nearly no reason to complain.  You offer a sufficient amount of content for that price.  My question to you is this:

What if I were willing to pay more?  Significantly more?  What could you do then?

I have some ideas I’d like to share, and I’m sure that my readers could offer some creative solutions as well.  Ultimately, I want you to be the clearinghouse for all of the video content that I watch on my television.  TV, movies, heck, let’s throw YouTube in there as well.

Plan #1

Much like I had with your DVD offering, why not offer a plan that includes unlimited streaming of all content that is over 12 months old (like you basically do today), but add the ability to stream up to 4 brand-spankin’ new movies a month.  What would it cost me to make this happen?  $20 a month?  Done.  $25 a month?  Probably still a yes.

I understand that movie and television studios are your challenge.  They deserve their own open letter.  Without them, however, you’re nothing.  You need to create an appealing enough situation that they’re willing to partner with someone else other than the cable companies.  The world is slowly moving away from cable, and you could be the reason it happens.  Embrace that.

Licensing fees aren’t the only way to compensate the studios.  Instead of millions of dollars for a license, what if you just threw them $2 every time one of their movies was watched?  I think you’d see a change in their tune, and that would still leave you

Plan #2

Offer EVERYTHING.  Television shows.  Entire series, not the last 5.  New releases.  Every movie ever made.  What kinds of costs would you have to pass on to me to make that happen?  Fifty dollars?  I’d pay it.  Licensing costs are outrageous.  I get that.  But the music industry has been able to figure this out with Spotify, Pandora, even Zune Pass, and there’s WAY more record labels than there are movie and TV studios.

Summary

In short, you’ve got a grand opportunity here, and I understand that the studios have you in a tough financial situation.  How do you make money from your service when more than all of your profit goes to licensing?  You need to make this work.  Because if each studio comes out with their own streaming service, you’re just another place to get the same old videos.  Don’t do it.  Change your approach, or someone else is going to Blockbuster you.

17 thoughts on “An Open Letter to Netflix

  1. An interesting thought. However, what you propose is to translate the existing cable model to today’s streaming/on-demand environment. Part of the reason I cut the cord is b/c I was sick of paying for 300 channels when I was only watching 10, or paying $100 / month no matter how much I used (week vacation? $25 for nothing). Obviously, we would like a service where everything is available. What if, instead of a flat fee, we were charged for usage ($2/hour maybe)?

    • I’d be comfortable with paying cable’s prices if I actually got everything. But I don’t. I get what’s on RIGHT NOW, what I might have DVR’d, or I can pay extra for PPV.

      If cable offered me what Netflix provides, I’d never have quit cable in the first place.

    • I love this idea. Wouldn’t it be great if Netflix offered everything instantly? I would love to watch movies right away and not have to wait for the mail to deliver it. I would pay more. I don’t even have cable, I couldn’t afford it. I hardly every watch it and just couldn’t see myself paying all of that money for maybe an hour or 2 a week. That’s why I love your pay by the usage idea.

  2. I just killed off my streaming plan. When I watch a movie, TV show, etc. I want to do so on my 50 inch HiDef with full surround sound. I want the special features. Sometimes, I want the captioning. My TiVo Premier XL lets me stream from Netflix, but the picture and sound just aren’t as good, and I miss out on the extras. For now, I’d rather get those red envelopes and play an actual DVD.

  3. You forgot a *VERY* interest option #3. A flat fee for base service (through most of the older stuff there or work in the STARZ contracted stuff). Then up-charge for new hotness from studio X.

    You want BBC? That’s $2/month. HBO? $5. Nick? $3. Figure out the monthly per customer fee, add a little markup to it for storage and bandwidth and the users can add “channels” a la carte.

    Judging by the prices here: http://www.jeffblankenburg.com/2011/07/12/why-do-cable-companies-exist/ it’d be a win for the studios, a win for NetFlix, and a win for the customers.

    I know I’d gladly pay the $40-50 per month to Netflix to stream the handful of shows/channels when I’d want versus the over $90 DirecTV eventually rewarded a loyal customer with just have HD DVR for BBCA, Discovery, and such.

    • A lot of people couldn’t afford it at $40 or $50/mo. That’s why they cut off their cable. I think people would just turn to Red Box. That’s just my opinion.

  4. You nailed it, content is key. That’s why I pay for Netflix but wouldn’t consider Hulu. Hulu just doesn’t have enough content (that I want to watch) to be worth the Plus subscription.

    The movie studios are where the problem lies. It’s the studios that have imposed the waiting period on Netflix to capitalize on “DVD” sales. In protest, I stopped buying DVD’s. I will wait for these movies to be released on Netflix.

    More content, more streaming, bring it!

  5. We got rid of cable 2+ years ago and aren’t missing it. Biggest advantage is that my kids aren’t bombarded with commercials for crap/fast food or toys (hidden benefit that should be part of Netflix’s advertising campaign).

    You’re right in that Netflix is leading the pack with number of devices it can stream to, however the complete package you’re talking about is closer to being offered by Amazon. Their streaming service/videos in the mail (called Amazon Prime) runs $79 per year. And if the content isn’t included in Prime, you can purchase shows a la carte and stream directly to your Roku or PC/laptop (Dexter, Fringe, etc.). I think they are still working on Wii and phones. Once they hit those devices, I would probably quit Netflix and strictly just use Amazon.

    Right now, I’m streaming netflix, and whatever I can’t get we purchase thru Amazon and stream.

  6. I would love to pay the current low flat fee for the old/inexpensive content + additional $ for anything else.
    What if you could stream a movie the day it is released in theaters?
    What if the movie studios set the price and the rate it decreases, e.g. $30-$100 the day of release, 20% lower every week after that or pretty much anything they want based on demand.
    What if I could set a Netflix alert when the price of a movie falls below $#.00 and Netflix and the studios can see what the pent-up demand is?
    We then get any content at the price we want (provided we are willing to wait) and Netflix and the studios get the maximum amount we are willing to pay for their content.

  7. Been struggling myself on what to do with the price hike. I would gladly pay 25$ a month if I get live tv and movies. That’s the reason I used to have streaming and a DVD at a time because even old movies like national treasure are not available on streaming.
    I guess it’s going to take some time to settle down once all the price wars are over. I vote for Netflix. May the force be with you!

  8. I agree, and I would LOVE to cut off DirecTV, but as long as they own NFL Sunday Ticket… they also own me 😦

    I would also love the idea of paying for only the 10 channels that I use (ESPN, Comedy Central, Discovery, Nat Geo, Science Channel, kiddie channels), but that isnt an option either. It is still relatively cheap entertainment, though…. for the cost of NFL SUnday Ticket for an entire season, I can maybe get tickets to 1 or 2 NFL games… and I much prefer being able to see the various camera angles, replays, etc from the comfort of my couch.

  9. Plan #1: Sounds like HBO on demand.
    Plan #2: You can compare video and music…video cost much more to convert/store/distribute than music…

  10. Sorry, I mean “YOU CAN’T COMPARE”

  11. I think Netflix is really on the brink of something. I think this is or something similar is the future to entertainment. I think it’s all about to change. I would like to see it happen for Netflix. I think they’re far superior to the other options out their and you can’t beat their prices either. I don’t know about doing a drastic change, but subtle tweaks for the better. Example, I don’t know if they should just up and charge $40-$50/mo. for more options, because I think they will lose customers that way. I think they should do a slight increase, have everything offered with streaming (offer DVDs for those who would like to wait, cheaper). I would probably pay double, but I couldn’t exceed $40/month. I could just see new releases in theaters for that.

  12. All the clips keep stopping beusace it is buffering, this is caused either by uploading it badly or to many people watch it at the same time. To prevent this press pause on the clip/video and wait for maybe 10 minutes or more depending on how long the video is, then press play and enjoy!

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