I assume that they charge more for the DVD/streaming plan? There’s probably a simpler explanation: Make it easy to sign up for the more expensive bundled service and harder to sign up for the less expensive single service.
My speculation is that while Netflix DVD offers the possibility of renting a wide variety of movies, the reality is that their customers predominantly stick with recent mainstream releases. And it’s more economical for Netflix to deliver these movies via streaming.
The OP mentions Satellite. If that is your ONLY choice it’s fine for a little surfing and email. It does beat dial up.
You don’t dare even try to stream music, or check out youTube, much less movies.
Not surprised that the business model for NetFlicks wants to get rid of direct mail DVD’s. Not at all. Those of us that don’t get decent internet are not enough to worry about.
Because the DVD business provides a service I’m willing to pay for (access to every movie ever made) but the streaming business does not (because the catalog is so severely limited).
Sure, if they could find a way to stream every top-tier movie, then streaming would completely kill the DVD business. But until that happens (and it looks like it never well due to copyright reasons), the DVD business has an advantage that many people (including myself) are willing to pay for. Seems like Netflix should just price the service accordingly.
I understand that you don’t like where Netflix is headed, but surely you understand th logic, right? There were probably quite a few people who liked having a Blockbuster store just a few minutes from their house. But ultimately, there’s no way a store could compete with the mail order or the kiosk business models. It’s probably a matter of time before streaming kills off the mail order business model, the only question is when.
The difference between the first-sale doctrine allowing Netflix, Blockbuster or the local library to offer any title that can be purchased and the necessity to negotiate streaming rights on a case-by-case basis means that streaming will never overtake the traditional DVD-by-mail service.
The advantage to DVDs/BR is that I don’t have to wait or look for what I want to see on-line, I have it when I want it.
I don’t like a DVD by mail service because I know what I am in the mood for now, but not 3 days from now. I’ll watch just about any type of movie: comedy, drama, sci-fi, thriller, shoot em up, love story, etc. Say tonight I’m in the mood for a good comedy. Well, if I order the DVD, then 3 days from now when it comes, I want Sci-Fi, or vice versa. With streaming, I get what I am in the mood for right now.
The overhead and logistics of maintaining stock and mailing items are large and complicated. Offering everybody the same internet service is easy, relatively, you’ve just got to figure out how to maintain server farms and allocate bandwidth. That’s a big problem. But one big distributable problem scales better than a thousand little individual problems.
I’ve heard two other factors that might be reasons that Netflix is trying to move away from discs towards streaming.
-
They have had a special arrangment with the post office in terms of how their mail is sorted. I wouldn’t be surprised if the terms of that have gotten less favorable (especially after Netflix “competitors” like Gamefly complained publicly about special treatment).
-
I’ve heard a lot of studios stopped selling rental copies of movies to Netflix (or in general), meaning they have to buy a full retail copy of each disc. That probably takes a meaningful bite out of the profits of the disc division.
With discs, I get commentary and other features. With streaming, I only get the movie.
Good point. I enjoy those a lot, too. But there’s no technological reason why the same features can’t be made available for streaming. More likely a licensing situation, or just no demand for it yet.
I signed up for netflix streaming recently. (I had the discs a few years back) I was really surprised how many movies are not on streaming. Mostly older movies.
Netflix’s physical DVD mail rental division is NOT what you’d call a cash cow. Not any more. In fact, it’s now exactly the opposite of that. It’s more like a legacy division encumbrance that they only maintain because canceling it would be (and actually was) a PR nightmare (even though in the long run, it would be the right financial decision). If I had to guess I wouldn’t be surprised if streaming is 100 times more profitable for Netflix than their physical mailings. It’s complicated, both required a huge investment in infrastructure, but the mailing side is and always will be manual-labor intensive and that means high overhead. High overhead that will not only not decrease over time, but will definitely only continue to increase. Streaming on the other hand is technology intensive, but once established its costs will drop significantly over a relatively short amount of time.
As for why Netflix’s DVD rental selection is still larger than their streaming one, that’s the fault of content providers (i.e. the movie studios). They consider the two, physical discs & streaming, completely different things and are much more restrictive about what gets streamed vs what gets sold/rented on disc. Plus Netflix had (and still has) a quasi-monopoly on physical disc rentals, but now they have many competitors in streaming (Hulu, Amazon, DirecTV etc.) all of whom try to get as many exclusive titles as possible.
As I said, it was a disaster a year or so ago when Netflix tried to spin off their DVD mailing side into a separate company, but that’s only because it was still too soon for them to drop physical DVDs (and the marketing campaign was confusingly mishandled). But I don’t give it more than another year or two before they do the same thing again, only quieter this time.
I live in Britain and use the Amazon equivalent of Netflix DVD by post, and it too seems to be on the decline. Which is a pity as I think it works very well. I would guess that in the ten years or so the service has been running they have probably obtained the rental rights of at least two thirds of every DVD released since then, as well as a very healthy selection of older discs. This includes foreign language and arthouse titles. I suspect Netflix has only a fraction of that. And herein lies the problem. Renting is such a great way to watch films and television shows, a much better tenure than buying DVDs of something you’ll probably only watch once then reselling them. If no one can be bothered to upload films to the likes of Netflix then that is a market demand that is not been met adequately met.
I think a lot of people who are quick to laugh at mail order DVD rental aren’t aware of it’s advantages. Streaming is very much geared towards impulse buys, partly because they have less selection so you take what you can get. Postal DVD accounts on the other hand encourage you to make a long list of things you want to see. I regularly end up watching things I’ve wanted to see for twenty odd years but never got round to buying at the time. But fundamentally this means I get to watch things I’ve asked for, not something I’ve flicked on on a whim.
Which brings me onto point two. Impulse buying lowers the quality control. And unlike a friend lending you a DVD that you leave unopened for months, because the mailman can only post you so many DVDs a week you watch it quickly.
Another problem I have with streaming is when I watch it through my PS3. For all it’s fast streaming abilities the PS3’s browsing speed is worse than dialup. Cable TV & Tivos are much the same in this regard. The time it takes to type in something to the search bar, only to find that they don’t have it (goes back to the limited selection). Incredibly frustrating.
This would make sense except, as I understand it, the DVD service is more expensive than the streaming service, and it’s dead simple to sign up for just streaming.
Everybody and their brother is getting into the streaming business. It makes sense for Netflix to take advantage of their early entry into the market and hold their own against the competition in what is obviously an important and growing market segment.
But nobody else offers something similar to their DVD service. In my opinion, they should hold onto that with even greater urgency. If it’s not earning them enough money, they should raise prices. Maybe they lose even more money by raising prices, though. I don’t know. But in my opinion they’re making a mistake by putting all their eggs in the streaming basket.
Video was going to kill the cinema - that didn’t happen. Will streaming kill the disc business? I suspect that music publishers have already made the move - will the film producers follow?
I think everyone understands why consumers like it: more selection. The reason people are “laughing” (certainly not the term I would use) at the service is that it is not an efficient business model.
Twenty five years ago, Blockbuster was a fantastic business model because almost anyone could pop down to the store and rent hundreds of movies.
Fifteen years ago, Netflix came around and was a fantastic business model because anyone could get tens of thousands of movies, and instead of maintaining maybe 20 or 50 Blockbuster stores in one metropolitan area, Netflix just needed one warehouse. With that, Blockbuster’s wonderful business model became crap.
Now, Netflix would ideally like to close 60 warehouses in the US in order to stream everything it can through the Internet. We aren’t there yet, but it is pretty clear that at some point, the idea of maintaining five dozen warehouses around the US is going to seem as absurd as Blockbuster having a store on every major street corner.
Ideally, Netflix would be able to stream any DVD in its collection. That’s not possible under existing law. But about four years ago, a company called Zediva tried a system in which it streamed movies to individual consumers that were played on actual DVD players in its data center. It was a novel workaround to the restrictions on streaming content. A company can rent a DVD to a customer, so why can’t it remotely play a DVD for the same customer? Zediva was sued out of existence by the movie companies.
Perhaps Netflix might try the same thing again; they have deeper pockets and perhaps four years on the courts might have a different opinion.
Unlikely. Consider the Aero decision.
Honestly, the best service is still completely illegal.