Sunday, November 25, 2012

Netflix a Good Service and Selection: Limited by Archaic Business Model and Technology

<p>I have been off cable for at least 2 months now. It's been a liberating experience. Bouncing between Netflix and Hulu to watch our favorite shows and movies is not difficult. What has been difficult is getting past the bone headed moves by the Netflix CEO, Reed Hastings, first trying to create two companies to stream movies and rent DVDs, doubling prices, and limiting concurrent streaming devices to levels not seen since around 2001. </p>
<p>There are times when Netflix has had technical glitches of accessing shows and what not. I expect that from time to time. It's technology and it's not perfect. I expect some mistakes in growing a business, but not limiting the customer experience, because of outdated technology and business models. </p>
<p>Separating companies to perform different features, limiting customer experience through technology degradation, and requiring independent and separate user accounts to get past the 2 concurrent device streaming limit is just plain old technology and reverse thinking. Why do I have to to create another username(email address) and password just so I can increase my concurrent streaming device count? That's another security combination I need to remember, write down, and manage. The onus should be on Netflix to do that, not me, the customer. </p>
<p>The specific limitation of 2 concurrent streaming devices is a level of access not seen since the early 2000's when there were no such things as an Internet enabled tv, smart phones, and media players. High speed Internet for residential access was in its infancy. Today every person I know has at least 3 personal Internet enabled devices capable of streaming Netflix. Families with kids have at least 10 to 12 devices all capable of streaming Netflix. Unfortunately, as a single account, Netflix is limiting the family to about 20% usage and preventing a family from using Netflix what it was designed for; Watching what you want when you want it. </p>
<p>I don't mind paying a little extra to add more concurrent streaming devices to my account, but I think it's ridiculous to require me to create a whole new account to increase it, and pay double. Pricing it as an additional $3 to $4 to double my access to four devices is an acceptable price increase. Charging double to double my access is not agreeable to me. Discount in quantities is typical. If I pay double, and yes it's more money for Netflix, but it's a pain in my behind to have to manage two separate accounts or be reamed for double prices. </p>
<p>I don't believe Reed Hastings has a handle on what this business has grown into. It spawned as an alternative to the brick and mortar DVD rental stores that were out of our favorite movies and charged late fees if it was returned a day late. In fact I was an early adopter. The company had some things to learn then, too. My first DVDs got lost in their ordering system and I lost the entire free trial period. I asked to extend it and they declined even though it was their fault. I stayed away from Netflix because of that incident for more than 5 years before giving them another try. I always watched from afar, though.</p>

<p>The initial business model created a recurring revenue stream for Netflix from movie buffs paying monthly. It gave them movies in the mail, giving them the time to watch and returning at their convenience with non late fees. Netflix then entered movie streaming giving us the immediate satisfaction we crave of watching a movie right then and there. At first it was all you can eat on as many devices as you want. Since some people took advantage and gave out their credentials to friends and family, and Netflix changed it to all you can eat on one device. People immediately screamed so now it's two devices. Hardly an improvement. And yet, through all of these device limiting modifications Netflix still lacks the ability to increase the device count at the account level, instead requiring the creation of a whole new independent account. </p>
<p>In my opinion, this is either a complete lack of intelligence and vision from Reed Hastings to effectively lead, grow, and develop the business, core infrastructure, and software, or it has something to do with the copyright holders placing unrealistic and innovation stifling monetary values on their content. Either way, it needs to be addressed by Reed Hastings and get the word out to his millions of customers that have been affected by the Archaic Business Model changes and outdated technology components .</p>
<p>There is a consumer demand for being connected and staying entertained with their favorite shows and movies. There is a growing movement to cut back, or even all the way out, the premium tv companies like Time Warner, Directv, Dish, etc and use these streaming services for a La carte and on demand streaming as a replacement or complimentary service. </p>
<p>The sooner these companies realize and accept the consumer cooce and direction the better the consumer experience can become. So long as greed does not get in the way and stifle the innovation that can bring us the services we crave at a price that is affordable and responsible. </p>

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