Netflix: You Can’t Always Get What You Want

January 6th, 2013     by ddeal    

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If the ultimate measure of a brand is what you do, not what you say, then Netflix is underperforming seriously. The company brags that “Netflix members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen” and that members have can “instantly watch unlimited movies and TV shows streaming over the Internet.”  But in reality, members have access to a very limited streaming inventory a problem exacerbated by the newly announced HBO/Universal Pictures agreement that will box out Netflix for the next decade. And recent high-profile service outages have made a mockery of the promise of “anytime, anywhere” viewing. Netflix would do well to start taking accountability for its brand and consider revising its brand promise to manage the expectations of its members.

As has been widely reported, Netflix suffered embarrassing service outages on Christmas Eve and New Year’s Eve. Netflix blamed Amazon Web Services for the Christmas Eve outage, and Amazon took accountability by apologizing and explaining the outage. Well, blaming Amazon Web Services helps members understand what happened, but the problem is that no one really wants to hear explanations, nor should they. We don’t need to know how the sausage is made; if we get a faulty product, we need accountability.

But for all the bad PR the services outages caused, a bigger, more ongoing threat to the Netflix brand consists of limited streaming inventory — a shortcoming Netflix attempted to redress with its December 2012 play for exclusive rights to Walt Disney Studios, only to suffer a setback in January 2013 when HBO and Universal agreed to a distribution arrangement that blocks Netflix from crucial content for years.

You don’t stream movies on demand on Netflix; you watch whatever Netflix can make available to you. In recent days, I wanted to watch four movies that Netflix lacked online: Breakdown, The Dead Zone (the 1983 version), Executive Decision, and Waiting for Guffman. In three out of four cases, the movies I wanted were available on DVD only, and the fourth, not at all. These are just recent examples. Too often, Netflix is not a place for me to stream a specific movie that I have in mind, especially with catalog titles — a major problem for the affluent and growing Baby Boomer population, which has money to spend and movie memories that date back a lot farther than The Hunger Games. Clearly, Netflix has a long way to go in order to fulfill its brand promise for people who want to stream movies. And remember, Netflix wants you to stream movies. This is the company that tried to foist streaming on its customers in the first place.

So what’s the solution? I think Netflix should take accountability where it matters: price. When a movie you want is not available, Netflix should offer you a rebate. When Netflix suffers an outage, Netflix should offer you a price break. Would putting its money where its mouth is motivate Netflix to become a high-performance brand? Moreover, Netflix could address the shortage of streaming inventory by revising its brand promise and setting expectations. For instance, movie service Fandor sets expectations by promising members “an online destination for watching amazing independent films from all over the world.”

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You won’t find Die Hard on Fandor, but you’ll have success with more esoteric movies such as the 1921 Buster Keaton comedy Hard Luck. By contrast, Netflix has engineered itself to disappoint by positioning itself as something of an all-purpose movie rental destination, which it certainly is not. Is Netflix the preferred brand for television enthusiasts? For recently run movies? I don’t know, but I’d like for Netflix to tell me. Unless Netflix does a better job protecting its brand, ironically Amazon will eat Netflix for lunch.


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  1. 5 Responses to “Netflix: You Can’t Always Get What You Want”

  2. By Steve Furman on Jan 6, 2013 | Reply

    Netflix did so many things right early on but now the brand is a bit tarnished. Netflix is really not that much different than the competition HBO, Showtime, Cinemax, etc., in that they vie for films. If it’s on HBO early on, it’s not on Cinemax. The difference is to your point, is how they market their product.

    I believe Netflix is kind of like the local cinema. I haven’t seen recent stats, but it was once reported that nearly 70% of people who go to the movies decide that day they will go. Then they look at Fandango or some other online resource to see “what’s playing.” Netflix is less for the serious moviegoer and more for families that need a variety entertainment sources for their kids.

    I’m serious about films and as so I have never opened a Netflix account. I prefer to go to the theater for new films and I’m a collector of DVD’s. Also subscribe to lots of premium channels.

    Amazon has a great opportunity.

  3. By ddeal on Jan 6, 2013 | Reply

    Steve, I think your comment about Netflix being like local cinema is right on. There is such a booming market for used DVDs and Blu-rays that it’s sometimes easier and surprisingly affordable to purchase even B-level movies about which I am only marginally attracted than to rent them. The only role Netflix plays for our family is to help us catch up on television programs that we’ve fallen out of watching , usually inspired by a request from our daughter Marion. For instance, we are catching up on Season 1 of “Once upon a Time” because Marion learned about the show and wanted to learn more about it. I’ve also caught one or two excellent “making of” documentaries about famous rock albums like “Dark Side of the Moon” — an interesting (and unexpected) niche. Maybe there’s an opportunity there. As always, thank you for taking time to comment.

  4. By John Hensler on Jan 7, 2013 | Reply

    I actually think Netflix is going to be OK. Sure, the outages are unfortunate, but those are problems that can be addressed. In addition, the HBO part of the recent Universal announcement isn’t that much of a change for Netflix as it is for HBO’s relatively new HBOGO extension of its service. I don’t believe that HBO’s library of shows were ever available on Netflix streaming. HBOGO has all of them… Sopranos, Six Feet Under, Game of Thrones, Veep, etc. As an HBO subscriber it’s a great extension of the HBO brand, and those Uni movies will only add to its appeal.

    I don’t really use Netflix for recent movies (I’ll use Redbox for that), and Hulu Plus is much better for most recent (like current and past seasons) episodes of currently-airing tv series. What I do use Netflix for is in documentaries and obscure indie movies, as well as the older seasons of certain TV shows, like you do. And I’m interested to see how Netflix’s foray into original programming will continue — David Fincher’s political drama with Kevin Spacey will debut next month, and then in May up to 14 new episodes of Arrested Development will hit Netflix streaming (and the current plan is for all 14 episodes to be available at once).

    It will be interesting to see how Netflix’s/Amazon’s servers absorb the hit of millions of comedy geeks simultaneously foraging on new episodes of one of the most acclaimed comedy series of the last 10 years. They had better have their act together… or the fallout from the christmas service outage will look like a hiccup.

  5. By ddeal on Jan 7, 2013 | Reply

    Thank you for the reply, John! I believe Netflix is vulnerable to the cumulative effects of partnerships that get formed (Universal) and partnerships that fall part (Starz). As for the technology, I do agree that hiccups can be addressed. I suspect Netflix will move away from Amazon Web Services for competitive reasons. And indeed originally programming is a good point and a potentially effective competitive weapon. It’s interesting to hear how you use Netflix and Steve Furman’s reasons for not using it. My sense is that listening to more digital and entertainment-savvy consumers like you and Steve would help Netflix better define its brand promise.

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