Verhasselt: Netflix: From DVD’s to Streaming
October 5, 2011
“Times change, people change” has
always been a motto of mine in reference to the constant evolution
and devolution of the people in my life. This saying rarely is
proven wrong except in one regard, and that is in reference to
change in technology. Times change, but people don’t always want to
change with evolutions in technology.
This has applied not only to the
people in my life, but to society in general. Exhibit A: The
Windows XP to Windows Vista transition in 2007. I worked at a Best
Buy during this period of time, and we could hardly give away
computers with Vista on them. This of course was caused by a few
bad reviews at its launch but mostly at work was the resentment of
change by the masses. Exhibit B: Facebook changes. It seems like
with every change made to Facebook, the now tsunami-sized wave of
complaints gets bigger and bigger. You’d think that more companies
would be sensitive to this issue and manage their product
life-cycles accordingly.
I understand the need to
consistently update your product in order to make it more
competitive and to give your customers a reason to buy the newest
version or upgrade. But there comes a point where you have to
declare the difference between a product refresh and just simply
forcing customers to do something they hadn’t planned on doing. And
if there’s one thing that consumers hate, it’s when a company
pushes them around.
This is what happened last week with
Netflix. They decided that it was time to move their company into
the future and split their streaming content business from their
DVD mailing business. A wise technical move, yes, but a PR
nightmare at the end of the day. Simply put, people got
pissed.
But how could this happen? Aren’t
Netflix’s customers all tech savvy individuals who know and
understand how the internet and technology evolves? Aren’t they all
watching Netflix on their custom made home theatre PCs, or watching
Netflix on their smartphone?
Netflix, who is based in their Las
Gatos, Calif., “tech bubble” kind of forgot that a good amount of
their customers are mainstream, middle-American individuals who
have a computer but still use DVDs for their home entertainment
needs. You can’t support old tech forever, and I understand that
this move was also based on content licensing, but you still want
your customer’s dime at the end of day.
It’s almost like Netflix forgot what
they were in business for. Netflix started off exclusively with
DVDs by mail but began to convert themselves into a streaming
content provider that “just so happened” to have a DVD-by-mail
service. And that’s where Netflix lost base with their core,
because what they really are is a customer-oriented,
home-entertainment company that just lost a lot of those
customers.