Netflix (DVD Delivery Discussion Only)

[Ishmael]

Why would Hastings' personal preferences have anything at all to do with corporate buying decisions? There's no necessary correlation there whatsoever (and I say this as a person who hates Netdix as much as anyone).

[Noiradelic]

I was mainly just pointing out the stinging irony.

No, not an automatic correlation, but as the founder of an internet company, he could have it reflect his interests a little if he wanted. And after all, it'd just be returning the priority to indie films they used to have.

[Donald Brown]

Netflix used to be good at carrying indie films and releases by smaller labels. Now, they don't even bother to stock many new discs by Criterion. No one expects them to order the same number of discs as they would for blockbuster films, but there's no reason why they can't carry them at all.

[Ishmael]

No one expects them to order the same number of discs as they would for blockbuster films, but there's no reason why they can't carry them at all.

Well, I know absolutely nothing about what rents and what doesn't at Netflix, but surely the company is just looking at their bottom line. If obscure indie titles rented well, I'm guessing they'd stock them. I'm sure there's some reason why they aren't carrying a lot of new Criterion titles. But if that reason isn't strictly a business decision, then we have to spin some wild-ass theory about how Hastings really hates Peter Becker or some such craziness. All those theories are much less plausible than the probably painful truth that there's just not enough return on investment on smaller titles, even considering that stocking nonprofitable titles might well attract customers who wouldn't otherwise use the service.

I'm not sure why I'm sticking up for Netflix, since I'm as annoyed as everyone else that I have a harder time finding the stuff I want to rent. Oh, and for anyone who hasn't tried Blockbuster yet, their service sucks ass. It takes them 2 to 3 days longer than Netflix to receive and send titles to me, even though their warehouse is in exactly the same town as Netflix's.

[Donald Brown]

There are surely enough people wanting to rent Criterions and indie films to stock a few copies of them. There's no good excuse for not carrying any.

[matrixschmatrix]

I've never fully understood why people defend shitty corporate moves by saying "oh, well, they're just looking at the bottom line." Of course they are, I have no doubt that their intention is to make as much money as possible- but if it doesn't serve you, complain about it to them and to other potential customers, and maybe it will turn out that serving your interests is going to make sense for them after all. If they're screwing me, I'm not going to roll over and accept it just because it makes good business sense for them to do so.

[ando]

On the lighter side, Brazilian comedian, Rafinha Bastos, does a good Chewbacca imitation in A Arte do Insulto, his hour long stand-up show added to the streaming service today.

[swo17]

There are surely enough people wanting to rent Criterions and indie films to stock a few copies of them. There's no good excuse for not carrying any.

Netflix does still carry a very small amount of new Criterion releases (and there are many more listed on the site with availability "unknown"), which is perhaps only more frustrating--they clearly know about these releases, they just don't care about them.

Oh, and for anyone who hasn't tried Blockbuster yet, their service sucks ass. It takes them 2 to 3 days longer than Netflix to receive and send titles to me, even though their warehouse is in exactly the same town as Netflix's.

Yes, it typically takes about twice as long for me to get something in the mail from Blockbuster, but this is still faster than never, which is when I'll get to see most of what I'd like to from Netflix. I am, however, pessimistic about Blockbuster's reliability going forward.

If obscure indie titles rented well, I'm guessing they'd stock them.

For any given title, there has to be a sweet spot of the right number of copies to buy. For a popular mainstream film, maybe that's in the ten thousands. For more obscure titles, maybe it's in the hundreds or less. Netflix has a pretty great system in place to gauge what this number should be (if you want to see a movie that's coming out soon, you can add it to your saved queue--assuming Netflix bothers to add it to their system). Then it's only a matter of balancing what the initial demand is going to be with demand in the tail. I would think that the quality or legacy of a film would dictate this. For instance, there is no doubt in my mind that the percentage of people wanting to watch, say, The Complete Jean Vigo 20 years from now relative to today will far exceed the same percentage for a film like Iron Man 2. Which is why Netflix's recent business decisions make no sense to me. Satisfying demand for most new Criterion releases would be just a drop in the bucket, and should constitute much less of a risk in the long run. Only maybe that's the point: Netflix isn't betting on there being a long run as far as physical discs are concerned. But even considering that, there has to be a right number of copies that they could buy now of more obscure titles to run a profit in the short term. Not to mention, if they started doing this it would go a long way to restoring the goodwill that they've lost in the last couple of years.

[ando]

Netflix does still carry a very small amount of new Criterion releases (and there are many more listed on the site with availability "unknown"), which is perhaps only more frustrating--they clearly know about these releases, they just don't care about them.

Does that list include streaming Criterion titles? I've tried "Criterion" searches on instantwatcher.com and on the Netflix site and got interesting results, but not necessarily Criterion titles. Two in the Wave, for instance, showed up on the first page. While it isn't a Criterion title its associations are clear enough - and good enough for me as I've yet to watch it.

[swo17]

No, just physical discs of releases from the past six months. Given Criterion's recent deal with Hulu though, I'd be surprised if any of their recent releases could be found on Netflix streaming.

[Ishmael]

Satisfying demand for most new Criterion releases would be just a drop in the bucket, and should constitute much less of a risk in the long run. Only maybe that's the point: Netflix isn't betting on there being a long run as far as physical discs are concerned. But even considering that, there has to be a right number of copies that they could buy now of more obscure titles to run a profit in the short term. Not to mention, if they started doing this it would go a long way to restoring the goodwill that they've lost in the last couple of years.

You make an excellent point, but there are other factors we know nothing about. For example, how many discs get broken or "lost" in the mail? Does this sort of thing happen more often with Criterions?* When you break down the costs of a couple Criterion releases over a short term (however you want to define it) vs. the cost of paying employees and housing inventory, are you really doing anything more than making a few cents for every dollar spent? I don't know, but again, if it was really so easy to recoup the investment, then why aren't they doing it? (Granted, willful foolishness is certainly a possibility, but I just don't think it's the most obvious possibility.)

I have to concede your point about longevity, but I don't think businesses that cater to such a huge and varied demographic factor in minor profits stretched out over the course of many years. I'm not saying I agree with their theory, I'm just saying I don't think they're looking at things that way.

I've never fully understood why people defend shitty corporate moves by saying "oh, well, they're just looking at the bottom line." Of course they are, I have no doubt that their intention is to make as much money as possible- but if it doesn't serve you, complain about it to them and to other potential customers, and maybe it will turn out that serving your interests is going to make sense for them after all. If they're screwing me, I'm not going to roll over and accept it just because it makes good business sense for them to do so.

I agree with you completely. I was trying to explain what Netflix's view might be, and also point out that the evidence suggests that the protests about how easily they could just stock every title probably aren't factoring in all the data. I'm certainly all for letting the asshats at Netflix know what I want them to do, I just don't think they'll especially care.

*Personal anecdote: I rented all three discs of The Human Condition when it was first released. I dropped all three discs in the mailbox at the post office at the same time, and all three of them went missing. Now, given that I've had almost nothing else go missing out of the huge number of items I rented, I suspect foul play. But was it just coincidence that this occurred with a new, pricey Criterion title?

[domino harvey]

Whoops, Netflix lost over 800,000 customers in the last quarter, 200,000 more than they thought they lost-- and more to come (or go, rather). Stock price just dropped by 27%. How's that business plan coming, Netflixy?

[tarpilot]

Ha, "blooper reel," I likes it

[Perkins Cobb]

Much as I like Reed Hastings to look stoopid, I take two alarming things away from that:

-- They're projecting a drop from 13.93 to 10.3-11.3 million DVD customers in the next quarter.
-- As one commenter here points out, based on those numbers Netflix is reporting $1.5 in profit per streaming customer versus $17.18 in profit per DVD customer ... so why the hell are they so eager to dump disc rentals?!

That also conclusively illustrates that acquiring streaming content is vastly more expensive than their disc business, and yet the opposite (a blatant lie) is a constant Netflix talking point that most reporters reprint without question.

[Perkins Cobb]

And the New York Times whomps on Reed some more. Mercifully, the focus of the piece is an indictment of Netflix for bailing on DVDs too soon.

Stuart Skorman, a Bay Area entrepreneur who previously ran a chain of movie rental stores and an Internet movie venture, last year worked with Netflix managers after licensing to the company a database of movie recommendations. He said he was struck at that time by how little Netflix seemed to care about its DVD rental business.

“I think they should have been paying much more attention to it because that was their customer base,” he said. “That’s what made them special.”

Steve Swasey, a Netflix spokesman, disputed the idea that the company did not care about its DVD business, saying it was still acquiring discs for the service and was focused on speedy delivery of movies.

Note the lameness of Steve-o's rejoinder.

[Noiradelic]

"He identified two long-term markets for it [DVD rentals]: rural customers who cannot or do not have broadband Internet access for streaming, and “film school types” who want a comprehensive catalog of old films."

Ha! So Reed thinks his rental market is either a bunch of hillbillies or the members of this board. What about people who want access to most new releases or whose tastes run beyond the biggest grossing movies of the last 30 years (of which they can only stream about 30% anyway)?

Based on the figures Perkins Cobb was quoting, they should be aggressively pursuing the remaining slice of the DVD rental market now while it's still out there (whom they could court relatively inexpensively by expandiing their selection a little and a little marketing) and use those fat profit margins to subsidize the licensing of streaming titles for the long run.

For example, how many discs get broken or "lost" in the mail? Does this sort of thing happen more often with Criterions?
But was it just coincidence that this occurred with a new, pricey Criterion title?

Maybe there is more pilferage, but at the same time, Criterion renters seem to damage discs significantly less. Often when I rent older CC titles, I can tell they've been in circulation a long time -- perhaps since original release -- but they tend to be clean with minimal scratching. How many mainstream DVDs do they lose through customers treating them like frisbees?

[Ishmael]

How many mainstream DVDs do they lose through customers treating them like frisbees?

Yeah, I have an ex who once melted a Netflix DVD on the stove because the film was so bad that she didn't want anyone else to see it.

How's that business plan coming, Netflixy?

Well, pardon me all over the place.

[Lemmy Caution]

Stock down almost 40% for the day in early trading.

The current $75 share price is just 1/4 of the high, set not too long ago, right before they started kicking their dvd business aside ...

[Matt]

Stock price just dropped by 27%. How's that business plan coming, Netflixy?

Actually, it's doing great for them. The stock has been overpriced anyway and is just now coming down to a reasonable value. Revenue, however, is up 66% over the same quarter last year. And though they lost 800,000 subscribers this quarter, they added 8 million last year, 3.3 million in the first quarter of this year, and 1.8 million in the second quarter. That incredible growth is how their stock inflated to $300 a share in the first place.

[Perkins Cobb]

I just hope the shareholders won't be as rational as Matt when they contemplate whether to throw Reed out on his keester.

[Donald Brown]

But doing so would be rational.

[TMDaines]

"He identified two long-term markets for it [DVD rentals]: rural customers who cannot or do not have broadband Internet access for streaming, and “film school types” who want a comprehensive catalog of old films."

Won't these people have their own collection anyway? Hence the wanting of a comprehensive catalogue of old films.

[Perkins Cobb]

Well, nobody can buy everything. I see around 500 movies a year and I don't have an extra $10,000 lying around to pay for them. Loss of rental sources terrifies me in the way other people fear death.

[Drucker]

I've found that for the most part netflix instant is useless to me. The TV shows I watch I can live without or are on Hulu+...so I switched yesterday to 2 discs and no instant (which is cheaper than 1 and instant!)

The most annoying thing is that they won't let me change plans until the new billing period. Didn't it used to be that as soon as you revised plans, they'd update/bill accordingly ASAP. We're having friends over for horror movies this weekend and I wanted to have some more discs out, but that's not going to happen. When did this change?

[swo17]

I've found that for the most part netflix instant is useless to me. The TV shows I watch I can live without or are on Hulu+...so I switched yesterday to 2 discs and no instant (which is cheaper than 1 and instant!)

The most annoying thing is that they won't let me change plans until the new billing period. Didn't it used to be that as soon as you revised plans, they'd update/bill accordingly ASAP. We're having friends over for horror movies this weekend and I wanted to have some more discs out, but that's not going to happen. When did this change?

Maybe it has something to do with you downgrading your instant viewing package, or it costing less overall. In my experience, upgrades to your account take effect immediately while downgrades don't take effect until the end of your billing period. It worked like this for me as recently as a couple months ago when I upgraded to 3 discs at a time.