Netflix CEO Comments On Recent Decisions 360
ExE122 writes "Netflix CEO Reed Hastings makes several comments about mistakes that were made over the past year. Hastings claimed, 'We moved too fast with it', [trying to exit the DVD-by-mail business] and explains that he still thinks Internet video will dominate in the coming years. From the article: 'Hastings also faced tough questions about last month's double-bomb disclosure: Netflix now expects to lose money for all of 2012, and it is looking to raise cash in a secondary offering of its stock.'"
convenience over quality (Score:5, Insightful)
When did we as consumers decide to forgo quality over convenience? I recently tested Netflix. I was sorely disappointed with the quality of the video as well as the lack-luster audio quality. I quickly deleted my account within minutes of opening it. Until they are able to stream true HD sound I see no reason to give up disks. 7.1 is a beautiful thing...not going to waste it. :-)
Good news! (Score:5, Insightful)
The Post Office is in the process of shutting down, so everybody'll have to get off the DVD plan, anyway, just like we were trying to cajole them to.
Re:convenience over quality (Score:2, Insightful)
That's been going on since even well before VHS vs betamax.
The real bombshell story (Score:5, Insightful)
What shocks (and appalls) me is that Reed Hastings has made several horrible mistakes, has led his business from profit to loss, and he will still take home a multi million dollar pay package for 2011. It's about time he admit that he is willing to actually PAY for his mistakes, and forego his compensation for the next year since it will clearly be a terrible one for the business. Until then, Netflix is a sinking Titanic with an irresponsible madman at the helm, refusing to change course.
It will take some time. (Score:4, Insightful)
he still thinks Internet video will dominate in the coming years
It will dominate in the coming years. Right after the media companies control the majority market share of all ISPs.
Unfortunate (Score:5, Insightful)
While I hate the idea that Netflix may not be around much longer, I'm not surprised. Mr. Hastings strategy seems to be focusing on maximizing contribution margins instead of maximizing profit. Getting one doesn't mean you'll get the other. What I don't understand is why Hastings believes that the major studios will allow Netflix to operate the online distribution at the price levels consumers demand. It is clear that Hollywood has no interest in lowering prices on digital content even though the marginal costs of distribution is minuscule. It won't be long before Netflix changes to a "on-demand" pricing model that Apple, Amazon, and a whole other set of competitors are already doing, and the recent exit of a third of their customers due to the recent price increase is a clear indication that Netflix is selling a highly elastic product. When will Hollywod ever learn that we don't want to pay 2.99 per episode for a show with DRM restrictions that force you to re-purchase the damn video for every device you have, and that paying $14 for a digital download when the DVD is selling at Wal-Mart, Best Buy, and Target for $10 is price gouging.
Re:convenience over quality (Score:5, Insightful)
Plus, it doesn't run on Linux without hacks which are more hassle than its worth.
As someone who runs Linux as his sole home OS, I can honestly say that doesn't matter one bit. Companies succeed on sales, and not fairness. Realistically Linux users are such a trivially small portion of the market that any company coming out with any product can safely ignore that segment without any fear of that decision harming business. If it works on Windows and Mac (and even the Mac part isn't all THAT important), then its good enough from a business perspective.
Re:convenience over quality (Score:5, Insightful)
walkman over full stereo
compressed DVD over laser disk
MP3's over mobile CD players
watching movies and TV shows on phones/tablets/computers instead of a big TV in full HD
PC's over main frames
laptops over PC's
tablets and netbooks over real laptops/desktops
the list goes on and on with mobility and convenience always winning over quality
Re:All-Streaming is a Great Idea (Score:5, Insightful)
There have been several high profile cases where companies pulled electronic, non-physical-media versions of content. Fact of the matter is, unless one has control either the device or of physical media, there's no way to prevent companies from pulling things off devices or from removing things from their available catalogs.
The only way to control one's destiny is to have physical media or to have information electronically stored on a device that one controls that the content provider doesn't control. Additionally, as DVDs and other physical media become incredibly cheap, it's easy to actually do this. Storage of 4.5" discs is also easy even for those in the smallest of living spaces if one discards the packaging in favor of those software storage bags that have room for hundreds of discs in a 12"x12"x4" space...
I have considered ripping all of my movies to electronic storage, but even not doing so it's not ridiculous to store them.
Re:Good news! (Score:1, Insightful)
Re:convenience over quality (Score:5, Insightful)
If it works on Windows and Mac (and even the Mac part isn't all THAT important), then its good enough from a business perspective.
...and on the Wii, XBOX 360, PS3, many tv boxes, most smart phones... There are enough vectors for Netflix to ignore Linux with no problem.
Re:convenience over quality (Score:5, Insightful)
Re:The real bombshell story (Score:5, Insightful)
I've worked for a couple of small companies. I think it requires different skill sets/strengths to get a company off the ground, known, and making money in the first place than it does to keep it running after you've gone public, have a bunch of employees, etc. Frequently it's not the same person who has both of these skill sets. A small company with very few employees, a few customers who know they are dealing with a small company, and no stock holders to keep happy can more easily make decisions on their feet and survive fairly well by making decisions that just get them through until tomorrow. As they grow, that agility is lost and I think a lot of managers and CEOs are not able to adapt their thinking and planning to the slower pace of movement and amount of resources it now takes to get things done.
Re:Raise money by giving up a couple of lattes (Score:5, Insightful)
Re:convenience over quality (Score:5, Insightful)
streaming is the future BECAUSE it involves higher DRM than dvd's have.
its just that simple and no need to look any further.
the industry loves BD since its harder to break. they love streaming since it costs almost nothing and has tougher drm than dvd.
streaming is good FOR THEM. physical media is better FOR ME.
please avoid their streaming models: make it fail, people. the sooner we sink their sales on streaming the sooner they'll return to physical media. physical media is much more freedom-oriented (and the quality is higher, too).
and as isp's put more and more caps on your bandwidth, I don't see being MORE dependant on the internet as being a good thing. not at all. its a drug dealer situation: they want you addicted to streaming so that they can control all the cards.
don't fall for it. don't give them what they dream about. it will never be good for you and me.
Re:convenience over quality (Score:4, Insightful)
Re:well (Score:5, Insightful)
Comments like this really annoy me. What has happened is that Netflix, a company that has kept rock-bottom prices for years, has been squeezed so hard by its providers that they're losing money hand over fist. Netflix is not losing money for all of 2012 because customers are leaving them.They're losing money because:
"Buying those rights is getting tougher, as studios are demanding more money for their valuable content. One analyst predicted earlier this year that Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $2 billion in 2012."
Netflix's cost of goods is increasing by more than a factor of 10. In light of that, I'm shocked that Netflix still managed to keep the cost to their customers down below $8/month (for streaming). Instead of sticking their customers with the entire increase, they decided to eat some of the cost by selling part of the company instead:
"Netflix now expects to lose money for all of 2012, and it is looking to raise cash in a secondary offering of its stock."
Now, would you rather stick with the company that is still trying its best to give you rock-bottom prices, or go back to the cable/phone companies who have spent decades trying to find ways to trick customers into paying more than you should (and who will go right back to doing it once Netflix has been laid low)? Unfortunately, human nature is such that most people (in the US, at least) would rather whine and act like Eric Cartman when they get upset than to stop and think things through. Netflix's competitors are betting on it, and unfortunately betting on the crappier side of human nature usually pays off for large companies.
Re:convenience over quality (Score:5, Insightful)
Re:convenience over quality (Score:5, Insightful)
Population density is a tired old cliche for poor broadband options in the US. The reality is that there are many dense areas all over the US where several million people live rather close to each other. If those cities cannot get the levels of broadband currently available all over the world, it's pretty obvious the problem is the duopoly situation with ISPs, and absolutely nothing to do with density.
No one is talking about 100% coverage. So stop making girly excuses for your lack of options and zero competition. There is no reason why LA and NYC cannot have the best of the best using your incorrect and feeble population density excuse.
Nothing will improve until apologist like yourself stop accepting the situation.
Re:convenience over quality (Score:4, Insightful)
People who want rips of movies don't need to go with netflix. This is what I don't understand. Netflix shouldn't need to have any kind of DRM, because at the end of the day, it's a terrible way to copy things. If you want to copy something, it's easy enough to just copy it from the DVD or even BluRay original copy.
No, it's simply that ripping from DVD or BluRay is easier than ripping from Netflix. Thus the effort to make ripping from Netflix as difficult as possible. Your argument is basically "People don't do X, because it's far easier to do Y instead," while ignoring the fact that the REASON it's easier to do Y is because X has been deliberately made difficult.
If Netflix was easily ripped, you can bet there would be programs out there that just sit there and rip shit off Netflix all day long. It's unlimited view, you don't pay per rental, just bandwidth. It looks legitimate -- they have no idea you're ripping, for all they know you're just a movie freak who watches ten movies per day -- so it's perfectly safe. It would be vastly preferable to any other type of illegal ripping, if it worked, which it does not. And there's a reason for it.
Re:convenience over quality (Score:3, Insightful)
Re:Raise money by giving up a couple of lattes (Score:5, Insightful)
It's time to kill that particular dinosaur. It doesn't matter how loud it roars or how many mice come out of the trees to defend it.
Subscriber supported channels tend to produce better quality stuff as they see the viewer as the customer rather than advertisers.