Many consumers who subscribe to Netflix today are wondering what happened to the quality of the VOD service and it does appear the company is on the downward slide. Ever since Netflix went public with an ill conceived plan to split the VOD offerings from mailer offering, offering VOD to only those who pay separately. Then they changed the name of the Netflix by Mail service to Qwickster in an attempt to split off what they believe is a business potentially past its prime.
Simply put, Reed Hastings and his leadership team may have lost their mojo. In drinking their own Kool-Aid, they put Netflix Corporation above their customers. Leading them to feel unappreciated with cost increases and strange business plan changes. Add into this the complexity of sourcing VOD content over the internet to subscribers, the situation is only getting worse.
Since Netflix has lost their Starz content deal, which provided top tier studio films such as “Toy Story 3,” “Scarface,” “Scream,” “Beetlejuice” and over a thousand more features, the selection has been pretty poor. In fact, the movie selection is so poor that Netflix no longer allows on its website members to see lists of new movies, search solely within movies, or see lists of different genre’s of movies. Instead Netflix lumps all television and documentary content together by genre with movies mixed in. Yes, people searching for movies have a dumbed down system to search for titles. Netflix intentionally removed functionality from its website, Apple TV, PS3 and Apps.
Essentially all of this adds to being a pain in the neck for members and that is clearly being realized by polling by Consumer Reports. In a Consumer Reports Poll, It looks like Netflix’s consumer happiness is dropping dramatically when compared to competing online services. The poll featured over 15,000 respondents and had other streaming services like Vudu, iTunes and Amazon doing much better.
Streaming services reader scores:
1. Vudu: 76
2. iTunes: 75
3. Amazon Instant: 74
4. Amazon Prime: 70
5. Hulu: 70
6. Netflix: 69
7. Video-on-demand channels: 68
8. Hulu Plus: 66
Although Netflix has a subscriber base which is growing handsomely, at adding about 500k more subscribers in a recent past quarter , it does appear that many subscribers are feeling a bit fatigued by the service and are not content with the VOD offerings.
Also playing a factor, Netflix has had an pretty bad public relations front as the company announced am ill-conceived “split” of the company offerings into 2 different companies, to split the VOD and Disc based service and price it higher. With rising VOD costs, it could be understandable, but to consumers it does appear as if Netflix is offering less content online than before.
The split of Disc and VOD seems premature today when you examine the sad fact that VOD content for movies has decreased in quality since the decision to split the subscriptions. Also, Netflix made millions of subscribers unhappy by the controversy and rate hikes. 2011 was a pretty bad one for publicity for the company as it made bad move after bad move. The net result is that consumer confidence in the company and happiness in the offerings slide down significantly as evidenced by the Consumer Reports poll.
If you looked at the Netflix VOD solution 2 years ago, it had a healthy selection of major hollywood films and television content. Since that time the major studios have pulled the content from the Netflix and the major deal with STARZ was not renewed. Today most of the movie offerings look like a wasteland of Hollywood old titles and rejects. If you look behind the slim recent titles to the back catalog titles, there are plenty of abysmal features which stun viewers in how Netflix even decided they were worth encoding let alone paying for.
There is a tiny amount of recent movies that Netlix does spend on, such as Marvel type movies and some half decent names, but those titles are few in number. The reality is clear as day, Ted Sarandos who is head of content for Netflix has decided to shift focus to Television. They tout the viewership of the TV and kids content. But if you look at the numbers, it is easy to know why, they just don’t have much good movie content. Just some back catalog, some d list titles and some solid TV and Kids content.
The kids content is killer for families eager to have something different than having to buy each and every title. It is a solid positive for parents to have Netflix and its diverse offerings and that must be a strong reason for subscribers to stay on.
Netflix has decided to focus on licensing television content and doing some terrific deals to resurrect shows like ARRESTED DEVELOPMENT and launch new series in the style HBO has excelled in. So this will help the company do well. But the sad fact is that for consumers if they like movies, they may be better off with the Disc by mail offerings the company is famous for.
Add into this new competition from an increasing field of VOD offerings like Red Box or a resurgent Blu-Ray with Ultraviolet and iTunes, its not pretty for Netflix. Pretty much the only thing driving subscribers is children’s programming and reruns of TV shows.
-Peace, Love & Apple Pie!
UPDATE: Netflix has just announced a deal with Disney to get more rights to their features for VOD. The bulk of new titles only hit Netflix starting in 2015, after the Disney Starz deal ends, but it is expected to add significant programming to the offerings. Our opinion is that the titles from Disney will continue to make Netflix a child friendly offering and augment that end of the programming and provide some back catalog help. It will also include Marvel, Dreamworks (not animation)and other titles from within Disney Motion Picture Group. These titles when added to the Dreamworks Animation and other titles, it helps the offerings nicely, but probably most for families.
Will the new Disney deal make a dramatic shift? hard to say, it is only some of their catalog and it will likely help. Will it push Netflix to reinstate the Movie search functions? We hope so.
http://money.cnn.com/2012/02/29/technology/netflix_starz/index.htm
Netflix Users Hate Netflix (But Cant Stop Using It), Consumer Reports Survey Shows.