Now that it’s passed the 20 millionth subscriber mark, I think it’s safe to say that home movie entertainment belongs to Netflix – especially when the company starts making noise about taking pay-per-view rights away from HBO. But if our future is going to come in a red and white envelope, isn’t it time to wonder if Netflix is up to the job?
I’ll admit: I’m one of those 20 million plus subscribers, and I have been for some years; I think that Netflix offers one of the best methods of DVD rental around – in large part because it requires almost no effort on the part of the renter – and I’ll admit to using Netflix Watch Instantly often as well. So, it’s not as if I have any real problems with Netflix as is – but I’ll admit to nervousness at the thought of Netflix being all that there is. And, with so many subscribing at such a rate – The company expects to get another 3 million subscribers by the end of Q1 2011 – and the failure of bricks-and-mortar competition like Blockbuster, that is beginning to look more and more like a possibility.
The problem, I think, is that Netflix isn’t perfect (In fact, it’s far from perfect, as the selection on Watch Instantly – or even of the more obscure offerings of DVDs – demonstrates), and without reasonable competition, it has less reason to improve than it would otherwise, never mind the possibility that its definition of “improvement” may not echo what users want (The removal of functionality to their mobile apps, for example, was not a great sign that they’re in tune with their customers). Netflix may have gotten to where it is now – the second largest subscription-based media company in the country – by trying to be the best, but what happens when they’re the biggest and can afford to get lazy?
It doesn’t help that the areas in which improvement is most needed – streaming content, basically; both the selection but also the delivery, which can stall or lose quality easily – are the ones most likely to cause trouble in future. Content providers are reportedly realizing that they can charge Netflix more money – and force them to accept additional content that they wouldn’t otherwise want – in order to license the big ticket items Netflix may have been looking for (Anyone wondering why both seasons of ABC’s Pushing Daisies is on NWI? Because that was part of the package that also netted all the seasons of the same network’s Lost)… Well, the ones that aren’t considering pulling content from the site altogether, to power their own alternatives, that is (Watch what happens to ABC and Fox content if Hulu does, as is apparently under consideration, turn into something akin to an online cable provider). Meanwhile, Comcast and Netflix partner Level 3 are still battling out over whether Comcast – which now owns NBC Universal, which also makes it a part owner of Hulu – is unfairly asking for more money for the bandwidth Netflix’s Watch Instantly uses, raising the question of whether the option may end up costing Netflix more money if other internet providers start doing the same.
Netflix is at a fascinating place right now; it’s become the biggest, and uniquely owns the two spaces that it’s in, at least in the US (Amazon, interestingly enough, has just bought LoveFilm, Netflix’s European equivalent; I wonder if they’ll try and launch it over here?). But now that it’s there, the real question becomes, what now? Without having the competition pushing it forward – and with pressures from its partners possibly even pushing it in the opposite direction – where does it go next? And will its customer base stay with it, wherever that is?
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