By Larry Teren
So now Netflix announces another corrective action to how they do business. The idea of spinning off their two operations into, well- two operations, didn’t seem right after all. It would have meant maintaining two websites, two credit card processing systems, two sets of login id’s and passwords, etc.
Originally, Netflix was established as a company that sends dvd’s of movies you rent for a fixed monthly fee. Once their competition started to perfect a method of allowing the customer to download the movie online in a reasonable amount of time, it made the dvd mailings about as modern as using a rotary phone. However, there is still a hard core user who prefers receiving a dvd and apparently enough of a business.
Netflix several months ago made a business decision to treat dvd mailings and online streaming of movies as two separate products and quickly increased their monthly fees, practically doubling it. This brought out the ire of their loyal customer base so the brass decided that the only way they could increase their fee to such a degree while essentially offering the same services was to split the services into two brand names with their own websites, etc.
Now they’ve decided to eschew the separate but equal approach and are reverting to one website, one brand name. The higher price remains- take it or leave it. A company spokesperson explains that movie distribution companies are asking for higher and higher usage fees and they need to make a profit as well.
The same type of complaint is coming from the cable tv industry. The networks are demanding higher fees from the cable tv providers for showing their signals because the content on these networks are going up in price from distribution companies. In other words, If Sony, MGM Viacom, CBS or whomever have to pay higher fees to television production companies, they need to charge cable providers more money to distribute their signals.
The fly in the ointment is that cable tv subscribers are already paying high monthly fees. A cable tv genius recently suggested allowing users to break up the channel package and let viewers cherry pick the stations they want while charging more for each station than they normally would get. This could be a dangerous thing because it makes sense as well as would get rid of some of the ridiculous channels currently wasting away on my cable box.
My cable tv service fee is hidden in part of the monthly dues for my condo whether I choose to use it or not. I’m guessing that there are about 60 or so channels in the service I receive. I don’t need more than maybe 25. Gone would be Lifetime, BET, Disney, anything Spanish or Korean, CNN, MSNBC, home shopping, etc. You get the idea. If I could whittle it down to say, 25 channels, it would be less confusing and distracting when trying to find something worthwhile to watch as an aid to helping me fall asleep.
Unfortunately, we are part of a special condo bundle package already getting a discount for being a large volume customer. I suspect that even if the 97 other unit owners could agree with me on which channels to eliminate and the cable company lowered our fee, the condo board would grab the extra pocket change into the budget and keep our dues the same.
I don’t download new release movies in full to watch at my leisure nor request dvd’s sent to watch in private. I haven’t even connected the dvd player back to the new tv I bought a year ago. I guess I’m part of the YouTube generation that checks their internet service video clip options whenever in the mood. Netflix is not going to get rich off of me.