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Netflix CEO Comments On Recent Decisions
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.'"
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. :-)
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.
I'm not a lawyer, but I play one on the Internet. Blog
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.
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.
Having to work for a living is the root of all evil.
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.
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.
Do not look into laser with remaining eye.
I'm pretty sure the guys giving me lattes are making money. Of course, they're also giving me a product I want at a price I'm willing to pay. I attribute this to them knowing their customers and what their customers want, making that product in a time-honored fashion and not fucking around with any part of the formula. I'm sure the owner of that shop (Which is a small local chain) is making a lot less than the Netflix CEO. But I think we're ALL making more than Netflix right now.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
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.
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.
A Pirate and a Puritan look the same on a balance sheet.