When Netflix announced that it was changing the pricing of its services to split streaming video and DVD rentals into two distinct options and begin charging for streaming, customers and fans of the service were distraught. However, until now, no one knew exactly how much. Since the change was announced in July, Netflix has lost an estimated 600,000 customers. To make things worse, Netflix lost its contract with Starz, a major provider of movies to Netflix’s streaming content. Analysts expect Netflix to loose even more customers when the Starz contract is officially up in February 2012. Netflix initially thought that, with the price changes, that they would still be making money in spite of the loss of users. However, when their stock prices dropped 13.7%, Netflix executives took notice and announced today a unique take on what may become of the service.
What Netflix sees in its future is the dropping altogether of its DVD rental services and a focus on television shows instead of movies on instant streaming. The biggest change is obviously the abandonment of the DVD rentals that Netflix was founded on. Netflix chief content officer Ted Sarandos said of the move, “the DVD business has a long life in middle America, it’s just not part of our future.”
I’ve already dropped my DVD subscription from Netflix so that particular change doesn’t affect me. However, more disturbing too is the focus on television. Sure. I watch a LOT of television episodes on my Netflix streaming plan. But, as a movie buff, I also enjoy digging through the, admittedly limited, collection of films to find those hidden gems or to watch a few classics here and there. Also, the decision to put Netflix in the television streaming market takes the company into direct competition with services like Hulu Plus that already have services that provide current television shows via streaming video. When Netflix announced the price changes to their services, I had hoped that it would mean more current movies and shows would appear on the service. Now it seems as if only half of that is going to happen. That leaves a massive hole in the streaming arena for movie aficionados like myself. If Netflix has dropped that ball, I wonder who is going to pick it up. Crackle… you listening?