mavrach wrote:I just worry what the future holds when everything goes disk-free. If you take away Netflix's DVD's, their streaming has a lot of big holes in its collection.
The DVD business is choking the streaming business, though. It's responsible for many of those big holes. If studios only
have the option to license content to Netflix for streaming, and can't make money from the snail mail distribution of physical media, they'll be more eager to license new and high-profile content.
What people can't seem to grasp about Netflix's attempt to kill the DVD business is that doing so would (probably) have produced the kind of rapid evolution of the streaming business that won't be possible as long as physical media lingers. The fact that consumers responded to Netflix's plans with pitchforks and torches is a sign that Netflix completely over-estimated the maturity of their streaming business.
They're keeping the current pricing model even after nixing Qwickster because, though unpopular, it's a tolerable incremental step toward killing the DVD rental business (which, at this point, is only holding Netflix back).
Having now screwed the P.R. pooch, Netflix needs to sit back, take a deep breath, and figure out some things they can do in the short-term to mature the streaming business without causing consumers heartburn. They can begin by using the money they're now not paying STARS to put together some creative content licensing deals that begin to convince everyone that those big holes are fillable.