Financial Analyst Roger Ebert Defends Netflix Business Practices

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.


  1. not rogers best work but i understand where he’s comming from. you have to look at streaming from a network prospective. it will have the best picture and sound that the studios will give them. bandwidth will get better in time. love it or hate it , netflix did the right thing. the dvd/blu side is going to become a headache in the next few months. warner is already threating to push it’s new relases back to 60 days. the post office uncertainty. also people always claim they want Ala cart for cable . here is your Ala cart. if anyone thinks that amazon wont spin off prime in a few years is naive.

  2. Honestly, I would like to restart receiving blu-ray discs from Netflix, but I don’t know how to eve do that anymore.

    And also, are they really still thinking that charging extra for Blu-ray is an ok practice?

    Is the shipping cost of such a packed disc that much greater? I know the cost of the discs themselves is not any greater.

  3. Lar

    I still don’t think DvD or Blu-Ray will die out anytime soon, people still like physical media. There is reason to believe Netflix when they say streaming is the future. To me I see it as there saying cut cost maximize profits. Oh as for the Post Office there not going anywhere.

  4. He must have much greater tolerance for sub-DVD-quality “HD,” pixelation break-ups, buffering delays, and tinny stereo audio than I do.

    Um, what kind of internet connection do you have? I had those kind of issues when I was on a 6Mbps DSL connection, but when I went to 30Mbps Cable, those issues went away. Many shows have 5.1 audio now, I get a buffering delay MAYBE once a week (and right now, I probably use streaming Netflix about 3-4 hours a day), and HD, while certainly not up to Blu-Ray standards, is better than the crap I get from Dish Network, and their SD streams look almost identical to DVD. The small amount of pixilation I have seen usually occurs within the first 5-10 seconds of a show or movie, and usually works itself rather quick. If you are really getting the issues that you described, I would call your ISP and have them run a line test. I would also upgrade your package if you are subscribed to anything under 10Mbps.

    Now, to other things. It looks like I may finally be canceling Netflix. I moved my disc-based service to Blockbuster about 6 months ago, and have been extreamely happy with them. I just signed up for the Blockbuster Movie Package, and since I already subscribed to the channels packaged in, it is cutting my Blockbuster price in half. Dish / Blockbuster’s stuff is improving, and they got tons of classic movies available on demand (many in HD).

    I also have had Amazon Prime for about a year and a half now, and the addition of free streaming is a huge plus. PlayOn lets me stream stuff to the PS3, so I have been enjoying DS9 for a couple of months now.

    While neither Blockbuster or Amazon is as good YET as Netflix, the fact that Amazon is giving it to me for free with a service I already have, and the fact that Dish / Blockbuster is giving me streaming, one disc out at a time (Blu-Ray and games included), in-store exchanges, and the fact that its only costing me about $5 a month, well, its a no brainer there. I plan to cut Netflix by the end of the month.

  5. Ebert is becoming lax in his old age.

    He has been privy to some of the most pristine celluloid presentations of movies, that the majority of the world has not seen. He used to harp on about how horrible dlp digital projection was when compared to film, and used to be a much more critical critic, pardon the pun.

    Nowadays, he gives crummy movies three stars where he would normally give them one or two, and doesn’t seem to care about the sub-par quality of streamed content as opposed to an actual Blu Ray disc, of which there is no comparison.

    However, this Netflix business has allowed competitors like Blockbuster to throw in their last attempt to stay afloat by offering unlimited streaming AND DVD/Blu Ray rentals, AND games, all for $9.99 a month. I am seriously considering dropping Netflix and going with *gasp!* Blockbuster.

    • Well if you have Dish thats the case, if you dont there is no access to that service, I hope there is soon, but Blockbusters app isnt on any of the consoles and neither is the Amazon app, I’m not going out to buy anything else when I have 3 consoles and a viewsonic streaming box already, so I hope that Blockbuster and Amazon get their act together and work with getting their app on many more devices.

      • Where is everyone getting that you have to have Dish to get Blockbuster? Its $11.99 a month at If you have Dish, they discount it by $2 and role in a couple of extra channels (all of which I already had).

        The streaming that I have played with so far seems to be identical to what Dish has been offering for months – I seem to have no new content now that I have signed up for the Blockbuster Movie Pass. I am just getting a bit of a discount on stuff I already had.