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.
JEFF BLANKENBURG 
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