Netflix and the disappearing DVD
CNETs Greg Sandoval has an interview piece with Eric Garland, CEO of media-tracking firm Big Champagne, discussing the recent price hike at Netflix and what it means – they are making the case that it’s akin to Apple’s move in 1998, when they introduced the iMac G3 without a 3.5-inch floppy port. The view of the discussion is Netflix is forcing a move away from DVD usage to streaming: “Netflix’s library of streaming movies and TV shows are often dated or obscure titles. It’s obvious Netflix is struggling to acquire more sought-after content.”
For filmmakers looking to distribute, going to streaming without the mastering, printing and shipping of DVDs may be favorable. For consumers, though, the DVD is still regarded as current technology, one they’re not necessarily eager to shed.
As you know there are a lot of us still watching DVDs and specifically those first-run titles on our relatively big-screen TV but that’s a lagging indicator. That’s like the person who so vociferously and so vocally objected to the introduction of that first iMac that came without a 3.5 inch floppy drive. “What am I supposed to do,” that person asked? “My whole life is on 3.5 floppy. I finally migrated off the 5-inch drive and now your marketing a computer that has no 3.5inch drive.” It was outrageous, until it wasn’t.
He notes that Netflix CEO Reed Hastings isn’t killing the DVD – “it’s already dying.” Netflix may simply be furthering DVDs to the grave.
Reed is deliberately creating dissatisfaction. He’s creating dissonance precisely because that title availability, those first-run titles, needs to be available more immediately and more widely as a (video on demand) or as a streamed offering. So this is a leverage play. This is Reed saying you can’t bifurcate. You’re going to have to make all of your content available in a way that your customer has clearly indicated that he or she wants. Netflix is wagering that if all parties are dissatisfied; if Netflix is unhappy because Netflix customers are unhappy and if Hollywood is unhappy and if everyone is unhappy then we’re going to speed the clock on new solutions.