Hello Netflix. Did You Lose Weight?

So Netflix is more or less spiting itself in half. It’s shedding it’s DVD by mail business and renaming it Qwikster (no relation to Friendster).  The majority of news and opinions that I have read have been brutal on Netflix. Oh, let’s not forget the stock market pounding down the price of Netflix to a fraction of what it once was. When I first read the news on techmeme I’m guessing I had the similar reaction of most people “Netflix just did what. WTF! Are they crazy.”

But, after digesting the news and reading Reed Hastings blog post I agree with what he did. The decision two split the company into streaming and mail delivery had to be one of the hardest decisions to make. Heck, I get anxiety at the grocery store trying to decide between whole milk and skim milk. So I want to give Reed Some credit for making a tough decision. We will look back to this day and say, “good call Reed” or define this day as the day Neflix began to fall apart. I’m going to say that we look back and admire the ballsy move made by the Netflix CEO.

Surface level, the move sounds crazy, but when you begin to really think about things it makes sense.  The DVD by mail business has most likely peaked. It relies on the US Postal Service which is not looking so hot right now. The DVD business is only in the USA. The DVD and Streaming operation were already acting as separate units. Intense competition. And it’s clear that streaming is the future. The majority of new signups are for streaming only packages. It’s going to be a race to see who can capture the market for streaming. Now that Neftlix has shed some weight, it can fun fast and fiercely into the world of streaming.

This means Netflix can work on acquiring better content. Everyone and their grandmother knows this needs to happen fast. I can only watch so many documentaries before I become paranoid about everything in this world. I few more comedies might help the situation. People will stream Netflix on their, iPad, Smartphone, Xbox, Wii or some other device. Streaming movies has the potential to reach every home and every individual in the world.  Why wouldn’t Netflix run full speed at this opportunity? No matter what happens, we should all be grateful we no longer have to pay $5 for a movie rental and then $5 more because we forgot to bring it back in 24 hours.

 

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