Why Netflix May Fail

I’ve been a fan of Netflix for years now, but I’m thinking that they are moving down the wrong path.

I just cancelled my subscription after several years due to the second price increase in six months for Blu-ray access.

The justification they give is that Blu-ray disks cost more, but I think the reasoning is that people with HD televisions and Blu-ray players are probably a little more affluent than average, and Netflix would like to exploit that fact. Blockbuster has a similar plan to the one I had with Netflix with no Blu-ray surcharge as well as free in-store exchanges.

In addition, the Netflix representative made no attempt to retain me as a customer. We watch one, maybe two movies a month, so I assume I’m one of the people Netflix loves to have as a customer (versus those people who watch 2-3 movies a week). If you do the math, those high volume customers barely cover the cost of postage, whereas I’m almost pure margin. That didn’t appear to matter.

Netflix has one of the best designed websites out there (Blockbuster pales in comparison), as well as a very responsive delivery system, but as soon as they stop focusing on their customers is when they start to fail.

One thought on “Why Netflix May Fail

  1. I don’t think it’s because they think they can get an extra buck out of the more wealthy. It is because the disks do cost more. Part of that is the ridiculous cost of the drm on those disks. I think the bluray association adds like $5 to the cost of each disk! Crazy. DRM failing us again.

    I also think they’ll be moving a ton of folks over to their streaming services. You can stream from your xbox 360, ps3 coming soon, tivo, roku, some bluray disk players, some tvs.

    Should be interesting to see how it plays out. Can’t explain the customer service though. I’d love to have you as my netflix customer!


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