Ever since Netflix announced that it would be splitting its discs-by-mail and instant streaming services into separate companies, which consequently means a rate hike for customers who use both, many people have been understandably upset by the decision, which has caused the company’s stock to fall. To provide insight into what this will mean for the future of Netflix, Bloomberg Businessweek ran an article last week from that renowned financial expert… Roger Ebert?
In the article, Ebert defends the Netflix rate restructuring as “inevitable and realistic,” and ultimately even the right decision. His argument basically boils down to claiming that internet streaming is the future, DVDs and physical media will go obsolete, and since he (Ebert) only uses streaming and not discs-by-mail, that means his rate will actually be going down.
On the subject of quality, Ebert seems to think that Netflix video and audio are just fine and dandy for his discerning cinephile tastes. For someone who has dedicated his life to the filmic art form, I’m very disappointed to hear him say this. He must have much greater tolerance for sub-DVD-quality “HD,” pixelation break-ups, buffering delays, and tinny stereo audio than I do.
About the fact that Netflix’s selection of movies available by streaming is much smaller than those available on DVD or Blu-ray, Ebert encourages the company to do better in this regard, but also brushes off the issue by saying that Netflix already has enough there now to keep his interest anyway.
Considering that the point of this article was allegedly to look at the Netflix announcement from a business perspective, Ebert fails to acknowledge the very serious issue of bandwidth limitations that plague much of our country’s internet infrastructure (including the fact that many internet providers enforce bandwidth caps on users). This is going to greatly restrict Netflix’s ability to expand. You’d think that might be important to note when writing for Bloomberg Businessweek.
Obviously, Roger Ebert is not a financial analyst. I don’t think he’s pretending to be one either. The editors of the publication simply thought that it would be a neat attention-grabbing gimmick to let the country’s most prominent film critic give his personal viewpoint on the changes to the country’s biggest movie rental service. That’s fair enough, and Ebert is entitled to his opinion. However, I think that he underestimates some of the major issues that Netflix still needs to address or overcome.
I also think that he short-changes the opinions of users who do wish to continue both discs-by-mail and internet streaming together, and who have every right to feel that Netflix has screwed them by nearly doubling their monthly rates. In my opinion, at the very least, what the company should have done was grandfather existing customers into their original plans, while forcing new customers into the new structure. That would have gone a long way to ensure good will toward the company.