Verhasselt: Netflix: From DVD’s to Streaming

Heath Verhasselt

“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.