Back over the summer and fall amidst the furore over Netflix’s attempt to split itself up, I was taken aback by the vehemence with which Internet commenters put down Hastings. A few months later in December Megan McCardle wrote an article in The Atlantic that chimed nicely my thoughts: if Hastings is such a fool how did he build Netflix up to be so successful that so many people rebelled in response to the proposed changes? The reaction was over-the-top even taking into account the ineptness with which the changes were communicated.

I’m a Netflix customer for the streaming. We cancelled the DVD service back in 2005 after trying it for a few months because it didn’t work well for how we watched movies, which was based on whimsy and instant gratification. We joined up again in 2009 because we were cutting the cable cord and we wanted a source for movies.

A lot of comments went along the lines of “put the customers first.” I wonder what the reaction would have been if Netflix had said, “The DVD business is unprofitable and we are shutting it down” Would commenters and customers insist that Netflix continue to offer the service at a loss? Or would they have clamored for a price cut from the already low $7.99/month? The lesson I draw is that sometimes you should not listen to your [most vocally entitled] customers. TV networks know this, they cancel beloved shows all the time.

The fact of the matter is that there are few if any other alternatives to getting content for less than what cable/telco/satellite charge.

Here’s the opening to what I believe is Netflix’s third act: Netflix Rebounds: Adds 220,000 Streaming Subscribers, Beats Street.


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