Maniacal Ventures

The Great NetFlix Price Increase of ’11

Netflix is being blasted by people for its new pricing model. I don’t understand why people are getting so angry over what is a pretty slight increase. As it is now, if you have the streaming service with one DVD out at a time it’s $12. This is being separated into 2 services with streaming costing $8 and one DVD out costing $10. This is about a $6 a month increase. Consider that cable companies have been lobbying in the US and Canada to throttle bandwidth to try and destroy the NetFlix business model and that, because of competition, NetFlix licensing fees are increasing at an alarming rate with one analyst predicting that “…Netflix’s streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012” , even a small price increase for the amazing amount of content and the ease of use that NetFlix provides over standard cable and broadcast service is worth is to me, especially if it keeps the company in business.

Instead of flying into mock outrage at a company that is stirring up the hornets nest in the world of entertainment, I say we support them and loudly. Let the Cable monoliths tremble. Let the CEOs of the studios cling to their archaic ways. The way we want our content delivered and the way we enjoy our serial shows and movies is changing as fast as the technology to create and deliver it. Vaudeville was replaced by modern cinema because it was cheaper to pay one group of performers and to print and ship reels than it was to pay a whole cadre of performers nightly. While I’m sure this was disastrous to the performers who didn’t make the transition to film, without this upheaval none of the amazing films and entertainment technology we now enjoy would have been possible.

We’re stuck, again, with a group of people holding onto their old and once proven business models and who refuse to change while, all around them, the technology is growing and morphing at an almost ridiculous pace. Vaudeville was around for something like five decades. Think about the last fifty years of entertainment that we’ve enjoyed. We’ve seen the gramophone record replaced by magnetic tape in the form of 8 tracks and audio cassettes which were replaced by digital optical disks. We’ve gone from having to place needle on to a vinyl disc and amplify the bumps in a groove to being able to touch a glass panel on a device that fits in our pockets and receive a stream of encoded binary numbers modulated over radio waves to hear a song nearly instantly streaming from a server perhaps hundreds or thousands of miles away. While the music industry is still fighting to maintain the old models, it’s obvious that things have changed quite a bit and only those who can adopt and adapt to these new technologies will succeed.

The same goes for film. Only recently have the prices for very large televisions come down to a reasonable level. Somewhere like twenty years ago, I worked at a small TV and Stereo shop and the few large, back-lit televisions we sold were delivered to very large, very rich houses. These monsters were bulky, heavy and their display was dim and had a rather limited viewing angle. Modern flat panel displays are light, skinny, display much higher resolutions that are viewable from almost any viewing angle and they cost only a fraction of those giant behemoths of only a few decades ago. Meanwhile, Cinemas have been replaced by Cinemaplexes. The giant screens I remember as a kid have been halved and then halved again. The studios charge so much for licensing that the only way a cinema owner can turn a profit is to maximize the number of screens by minimizing the screen real estate and to charge as much for a large tub of greasy popcorn and box of stale Milk Duds as would cost a consumer to just buy the BluRay, a box of Microwave popcorn and a twelve-pack of decent beer.

On top of that, you can pause your home theater to take a leak, and if there are screaming kids ruining your movie going experience, you most likely made them yourself and it’s your own damn fault. At your home theater, you can have a beer without getting thrown out or chew on a nice home-cooked steak or bag of potato chips while you watch your film, unmolested by ass-hats yammering into cell phones or jerks sitting behind you, loudly spoiling the ending.

The cinema experience, because of the studio’s greed, has become pretty bad in a lot of theaters while home theater technology has become better and cheaper. 3D helped bring up studios profits the last few years by increasing ticket prices but there are less butts in the seats and the projectors are ruining the regular viewing experience at a lot of theaters. It would seem counter-intuitive that the studios, in a bid to counter less ticket sales and increased purchasing of home theater equipment, would keep pushing against new technology like digital content distribution, especially when they can charge an arm and a leg for first run movie rentals, but they came late to the game and are playing catch up on both infrastructure and marketing and NetFlix, the fastest and strongest horse out of the game, is a prime candidate for their rage. Instead of creating decent competition and driving the technology, instead of trying to improve average consumer bandwidth and saturation so they can market their own online services, instead of supporting the growing quality and saturation of home theaters and addressing the declining quality of projection in regular theaters and the smaller screens and the overpriced concessions, they just tenaciously grasp at the old model and fight to stifle any changes. Instead of trying to provide both new revenue streams as well as a better experience for their customers while lowering production costs by embracing streaming services, they continue the same practices that have caused the decline of modern cinema and the rise of home theater, things they claim are what are killing cinema and leading to more home theaters in the first place. It’s like the MPAA, RIAA and studios all live off of illogical feedback-loops and can’t hear any other options over the sound of their own harrumphing.

It’s not a question of if things are going to change, it’s a matter of when. I’m sure that there were quite a few people during the reign of Vaudeville who pushed back and argued and screamed and hated the new technologies that were taking away their livelihood. It didn’t stop the changes that happened, it may not have even slowed them down. I’m also sure that there were quite a few people who embraced the new technologies and embraced cinema, converting their theaters to part time Nickelodeons and finally to full time movie houses and starting studios that created the legacy of film and cinema that we have today. Their heirs, instead of embracing technology, are fighting against the same kind of change today, stifling the next evolution of entertainment. They should be embarrassed, but they’re too busy looking backwards and at their bottom line to see the door opening in front of them. Businesses like NetFlix are a peek into the future. They are vital in driving and shaping the future of the consumer experience of content delivery. They might even be driving the very politics behind the monolithic Internet Providers and federal regulation. NetFlix is important if we want to be able to choose what we watch and how we watch it. Leave it to Sony and Universal and services like NetFlix and Redbox will disappear, replaced by the dim prospect of having to get your second run BluRays for $45 at WalMart ($12 box of microwave popcorn sold separately).

Are we really going to let $6 a month sour us on one of the only cheap, easy and user friendly alternatives to the stagnant, bloated and greed-fueled sloth that is modern cinema?

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