Apparently Netflix is about to have a major split.  I don’t think this is the best idea.  Unless there is a major problem with the DVD rental model or the streaming model there’s no advantage in creating a new brand.  The Netflix brand may have lost 1 million of its 25 million subscribers when it decided to nearly double its fees, but it’s confusing to constantly rebrand and honestly, the people who really care about this stuff will know it’s really Netflix under a new name, so it won’t confuse the right people anyway.

Netflix, if you want to improve things, here’s what you need to do:

1.) Keep your business as one brand.  Save the money you’d otherwise spend on new marketing and just provide more value for the customers.

2.) Become a theatrical distributor.  Or buy one.  Either way, you’re positioned well to take a few risks on back end deals, buying indie films otherwise in financial and distribution limbo, then flogging them to renters, and finally Netflix subscribers.  Get the jump on the increasingly niche indie market.

3.) Try developing some of your own content.  With Google in the game, developing its own content, Netflix should provide some sort of “free” content on its site (like the BBC iPlayer, which shows recent BBC programming for free) and then the bulk of its available programming on the subscription service.  New model.  No FCC.  Show whatever content you like.

And just in case you don’t think that growth and moving up in the world is that important because hey, you don’t have to worry about much competition, think of RIM (the creators of the Blackberry) and then read this.  Yes, Facebook is moving into your territory.  Be afraid Netflix.  Be very afraid.

And that’s it.  Really.  Netflix, you’re going the wrong way right now.  Think big.  Don’t have a split personality.


5 responses to “Netsplitz

  1. Theres less $$ in DVD rental model and everything is moving to the cloud. Raising the prices should have never been on the table because streaming costs less overhead which means they should have been able to CUT prices. Not withstanding Qwikster is DOA it won’t last to 2015.

    • Maybe, but look at this. If Netflix sells its streaming service, it should be to a real player who is already trying to get in, like Google or Facebook. Think of the partnership! Of course they could be just doing this to drive the price up for those folks. Either way, I think the iPlayer model works nicely because it means you see what’s on now, but if you want to own the programming on DVD or whatever you still have to pay for it. I always said the best business model is the Crack Dealer model: give them something for free, then charge a premium for what they’ll really want. The trick in media is making it secure and creating a convenience and added value that make it worth it. Music piracy isn’t nearly as bad as it used to be largely because of services that are so cheap and so convenient they are worth the time you would otherwise spend scrambling around on Bit Torrent to find what you want.

      • I like the player Idea although I see DVD as more of a long term buy than rent because of instant gratification. If anything netflix should look into the redbox model they should prob just buy them out….

    • I should also add I agree about the DVD business being less valuable long term, but it is great that they can rent you DVDs of things you can’t find on line. Also, it’s handy for the bonus features on the DVDs. Pretty soon one of these giants will come up with a way for the little guy who makes an indie film to sell it online complete with all the DVD features but for less money than actually printing DVDs and for cheaper bandwidth. That’s the long term solution. Of course, physical discs will be with us so long as people want them, and when internet isn’t always perfect or fast everywhere, people will still need the physical disc.

      I often tell my friends outside the US to get a netflix subscription for streaming, saying they travel to the US a lot and that’s why they pay with a foreign card, then watch over a proxy server. In the long run, the thing that will die off and never come back in any form is regional sales of media. The Internet eliminates regions.

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