Steven J. Vaughan-Nichols
Yes: Big gain
No: More pain
Christopher Dawson
Best Argument: Yes: Big gain
The Rebuttal
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Great Debate Moderator
Testing 1, 2, 3
Just conducting a mike check. Dawson, SJVN come in.
Posted by Lawrence Dignan
Ping!
Ping!
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Read you loud and clear
Ping
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Rate Netflix's last five months
Netflix has obviously struggled with the Innovator's Dilemma. Rate its handling of the pricing, DVD-by-mail and earnings debacles. I admire the trying to stay ahead of the curve thing but...
Posted by Lawrence Dignan
Netflix's management has been idiots
I mean come on? Big pricing increases without explanation--and believe me they had reason to up their rates since the content providers were demanding 10x more than Netflix had first paid them--splitting the service into two? Trying in effect to kill off DVDs this early in the game? Dumb. Just Dumb. But, at least they realized they were dumb and they're trying to make things better.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Do you still watch DVD?
DVD by mail was a great model when people watched DVDs. Kind of like TV advertising was a great model when people watched live TV. There are still DVD watchers, actually (plenty of them), but screwing with pricing on a faltering market doesn???t make a lot of sense. This is also, in case nobody noticed, a pretty pathetic financial period. It needs to be all about value and that value prop has eroded quickly for Netflix. Bottom line: They're handling of pricing and managing DVD by mail (originally their core biz) has been poor of late.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Is its bet on streaming media correct? And what are the risks?
Dawson mentioned that the DVD debacle hurt the brand. Is the long term bet solid?
Posted by Lawrence Dignan
Yes, we're heading for a streaming future
and Netflix is still the biggest player in both the older DVD-by-mail market and in streaming. No one else is even close. In the long run, Netflix should win out. IF they don't make any more blunders. IF the content providers don't try to cut off streaming. And, IF Apple or Google don't make a successful play in streaming video. That's a lot of IFs, but I think they'll still make it. That said, I'd be looking for a new CEO if he makes one more blunder.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Streaming is the right bet, but the road isn't clear
Yes absolutely. There are devices aplenty with many more to come, especially with the growing number of superphones available and tablet prices dropping like rocks, not to mention emerging set-top boxes, connected TVs, connected cars, connected refrigerators (seriously)There are more than enough devices to support streaming everywhere, all the time. Notice that your average connected fridge doesnt have a BluRay player. The risks? Bandwidth, baby. There are more devices and more content and more demand than inexpensive bandwidth. See how fast you hit your data caps or pricing tiers on a 4G connection watching the entire first season of The Walking Dead in HD. Unless Google works some fiber miracle outside Kansas City, were in for more pain here. How much bandwidth can you afford? And can you justify it for entertainment? Studios also represent a major risk they havent exactly caught up on this business model and represent a constant threat to anyone reselling content. Can you say digital rights?
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
About those studio risks...
Do you think studios will play ball with Netflix or aim to keep it in check? Studios are dealing with Amazon, but may aim to drive costs up for Netflix. Thoughts?
Posted by Lawrence Dignan
The Studios are the real problem
The simple truth is that the MPAA and buddies don't know what to do with streaming video. Like the RIAA before it they're reluctant to embrace this new channel for their product. Just look at the mess NBC and Disney have made of Hulu Plus! In the end, the studios will determine who wins and who loses, but they still don't have a real plan so it's hard to predict if the winner will be independent video providers--Netflix, Crackle; studio-associated Internet streaming companies--Hulu; or an existing content vendor--Amazon, Apple.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Amazon has scale...Netflix has lost out
One of the most damaging things about Netflix' recent problems is its loss of credibility and clout with studios. Amazon has such massive scale and proven distribution capabilities (in literally anything they try to sell) that they will have a clear advantage with studios long term. They will be able to compete on price in ways that Netflix simply won't. Amazon also already sells other digital content (a lot of it), making it a better ecosystem with which studios will want to partner. The timing of the Kindle Fire couldn't be better.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Release windows
Do you expect content companies to provide Netflix better release windows for movies? It's hard to get anything current on the streaming service. Will that change for Netflix and/or Amazon?
Posted by Lawrence Dignan
Alas, no current content for us
The studios want to milk content for every dime they can. At this time, they're still not sure what to make of streaming. So, it will still be movie theaters/live prime-time TV; DVDs/on-demand video, and finally Netflix, Amazon, et. al.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Not anytime soon
SJVN said it already - studios are reluctant to embrace new models. They're going to hang on to their DVD distribution models with death grips until consumers utterly rebel or new business models emerge to get them better royalties and more protection for digital content.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Amazon vs. Netflix
What kind of competition will Amazon provide to Netflix going forward?
Posted by Lawrence Dignan
It's war!
While Netflix has lots of things to worry about, Amazon is a real concern. There's a darn good reason why Netflix just partnered with Barnes & Noble on the new Nook tablet. They want to be able to deliver content on an inexpensive tablet that's not under Amazon's control and is likely to be quite popular.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Amazon will crush Netflix
Apple is in the ring, too, but the Kindle Fire, a device that is not only commodity-cheap, but optimized for Amazon digital content, is the ultimate gauntlet. It gets thrown down next week. Amazon demonstrates over and over again that it can scale sales and distribution models like no one else. Netflix can create Qwikster. Who's going to win that fight?
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Putting money behind your opinions
Two questions: First, would you buy Netflix shares here? Second, would you recommend a non-Netflix subscriber to become one right now? Support your answers
Posted by Lawrence Dignan
To buy or not to buy, that is the question.
I don't buy any tech. stocks since I cover the industry, but if I did, I'd buy Netflix still. They've had their knocks. They should be coming back. As a video consumer, and Netflix subscriber, I still recommend Netflix. Don't forget that, unlike Amazon, with Netflix it's a one-price buffet. You can watch all you want on DVD or online for a single price and without ads. With the exception of Amazon Prime's limited selection, no other streaming service offers so much for so little.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Uhhh, no. And no again
Competitive pressures are far too high from Amazon and Apple, to say nothing of disruptive startups, the studios, and indie content providers. Google will no doubt be moving into this soon enough (they're already making some progress on YouTube). No shares for me. Not if you paid me. I subscribe to Netflix and use it frequently. But I also use Amazon and iTunes frequently. As they scale up their available content (happening very fast), I'll gladly dump Netflix. And I certainly wouldn't recommend that friends jump onto a bandwagon with broken wheels.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Do you have a Netflix subscription? Why do you keep it?
Sounds like both of you do. What would it take to dump Netflix?
Posted by Lawrence Dignan
What would it take?
It would take a fixed price service with either, or better still both, more video selection and more up-to-date video. One of the big reasons I don't see me leaving Netflix behind anytime soon is no one else is offering either of those.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Just a wee bit more content elsewhere
A growing number of the shows my family and I watch via Netflix are coming over to on-demand services, Amazon, and Apple. That's about all it would take. The on demand is free through my cable provider and with Redbox I can get any DVDs I want. Fill in with other providers that shoot stuff right to my tablet and I have all I need (and a whole lot more) at reasonable prices.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Does Netflix have an economic moat around its business?
In other words, does it have a defensible business model.
Posted by Lawrence Dignan
Nope.
Netflix, like any of the video providers, yes, even Apple and Amazon, are dependent upon the kindness of strangers. Or, to be exact, some very strange media companies. If these companies decide, for example, that the only way you can get their content is on their own Internet "channels" everyone else is out of luck. I don't think they're going to do that. Hulu Plus could have been that, but as I said they don't seem to have a clue about what they want to do. But, we're in a place where any middleman content business model is in danger. And, that by the by, includes far older businesses like over-the-air TV stations.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
If it has a moat, the bridge is down
No there are a lot of potential competitors. As I mentioned, studios will increasingly want to be selling their own content. Other upstarts will find ways to leverage cool tech to stream things better, faster, and cheaper, or to provide ad-supported cheaper content, or to provide indie contentyou get the idea. My money is on ad-supported content, partnerships with mobile providers, and the right content deals. What if your data usage was cut by 50% by Verizon if you were streaming from Amazon? Not saying it will happen, but if it did, talk about crushing Netflix. I can see Apple or Amazon brokering a deal like that. I can't see Netflix having the muscle left to do so.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Just a reminder...
You're paid by one of those strange media companies so let's hope Uncle Les isn't reading this. Only half kidding. How important are mobile devices to Netflix? And more specifically how important are data charges to Netflix's future?
Posted by Lawrence Dignan
Mobile Video Woes
That's a darn good question. Right now, most people aren't watching video on their tablets and such. I think that will change though. Certainly both Netflix & B&N and Amazon all hope so. That said, data charges are going to hurt everyone in the mobile space, and, for that matter, in traditional Internet networking. The carriers and ISPs have grown ever more greedy in both cutting down our bandwidth and in charging us more for what we do get. This is going to be a real problem for anyone in any part of the Internet video business--including those of us who just watch 30 Rock on Netflix or what have you.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Vital
Mobile devices are always with us. On the train, in our car, on a plane, in our bedroom, in our pockets. Phones and tablets are getting smarter and cheaper and increasingly able to interface in HD with our bigger screens as well. Oh yeah, if there's not a good mobile strategy, there's no strategy at all. Data charges will be a major pain point for everyone if some deals can't be struck between carriers and particular content providers. We all seem to keep paying for the data, though, don't we? Upping our allowances for increasingly rich mobile experiences on increasingly awesome devices that beg for something better than email and Twitter. This will be a pain point and risk, but ultimately, what are we going to do? Read ZDNet on our mobile device or watch a movie? Most likely both, regardless of cost. Data is quickly becoming an inelastic good.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Netflix has started to create its own content. Can that pay off?
HBO-lite anyone?
Posted by Lawrence Dignan
I think that's what Netflix would like to be
New movies that people want to see and great original content. Sure. Can they pull that off? Well, we'll see. House of Cards, starring Kevin Spacey, will prove if they can create as well as deliver content. In the long run, I think any content middleman needs to also be a content creator. Yes, it's expensive, but it's the one way you can stand out from the others. Just ask Showtime. They had to follow in HBO's footsteps or they'd be just another generic movie channel.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Creating content is too expensive
Let me rephrase that...creating content that people want to watch is too expensive. Brutally so, in fact. Millions of people create junk for YouTube, but Game of Thrones doesn't come out of a small budget. You need great writers, great actors (even if they're unknown), great marketing (not necessarily traditional, but great nonetheless), and the right distribution channels. This is a losing game for Netflix and I predict that it will go by the wayside soon enough. At least, I hope for the sake of its stockholders that it does.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Losses now, international dreams later...
Netflix said it will take losses in early 2012 to expand in the U.K. and Ireland. Is that the right move?
Posted by Lawrence Dignan
Smart move
You have two choices in the technology and media biz. You can grow or you can die. I don't see that Netflix has any choice but to try to grow internationally. Now, if the BBC would only finally let us folks on this side of the pond get iPlayer access I'd be a happy man. Hear me Beeb!?
Steven J. Vaughan-Nichols
I am for Yes: Big gain
In streaming? Yes. DVD, not so much
Europeans have been building mobile infrastructure and bandwidth for far longer than we have in the US. They're far more capable of dealing cost-effectively with streaming than we are and their sales models for mobile devices forces far greater competition on plans. This is good news for streaming services. DVD by mail is low margin wherever you are. Netflix needs to tread carefully here...they probably won't.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Unwinding DVDs
Can Netflix unwind the DVD by mail service constructively? Much like AOL is doing with dial-up service (yes it still has those).
Posted by Lawrence Dignan
Sure
In fact, they need to keep it going for years more. Listen, I watch Internet video on my TV all the time. But, there's a lot of content you can only still get on DVDs. It's that simple. Besides, even today, DVD and Blu-ray sell-thru and rentals still represented about 79% of the $3.9 billion that U.S. consumers spent on home entertainment in Q3, according to DEG, an industry group that tracks the video biz. Netflix and everyone else in the sub. streaming biz? 7%. The DVD will still be with us in 2020, and so also will be Netflix's DVD biz.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Can Netflix do anything constructively this year?
No. Even a company with all the right business acumen (which Netflix seems to be sorely lacking) would struggle with this. How do you deal with a legacy platform that is dragging down margins and headed nowhere fast? You certainly can't spin it off into a separate business. They demonstrated that quite handily. And the growing ubiquity of RedBox makes this even tougher. One possible option? Buy RedBox.
Christopher Dawson
I am for No: More pain
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Great Debate Moderator
Will customers get over Netflix's pricing changes, screwups?
Thoughts?
Posted by Lawrence Dignan
Eventually
But, Netflix should have done a better job of explaining what they were doing with the pricing changes. And, as for the rest, it would have been nice if they were to offer users a few free DVD rental months or the like to make up for their foul-ups.
Steven J. Vaughan-Nichols
I am for Yes: Big gain
Yes, but it doesn't matter
They've lost momentum at a critical time. It's too late to fix what's gone wrong, no matter how short people's memories are.
Christopher Dawson
I am for No: More pain
Talkback
RE: Great Debate: Will Netflix emerge from its big collapse a long-term winner?
RE: Great Debate: Will Netflix emerge from its big collapse a long-term winner?
RE: Great Debate: Will Netflix emerge from its big collapse a long-term winner?
For starters, their streaming content sucks, period!! Their customers have to wait 28 days to get new releases (on DVD only), that's fine, but they should have conceded the 28 days only if they could stream new content. Without streaming new releases their streaming service will go nowhere, and to me it's currently worth $0 per month.
Starz has already walked away from Netflix, studios are now in the power position and dictate their terms and conditions to Netflix, more money, less streaming content etc. The studios have absolutely no desire or motivation to stream new releases. They want to sell DVD and BluRay discs. Hollywood lobbyist have Senators and Congressmen in their pockets and "our" representatives will do whatever the studios want and pass almost any law the studios write up.
RE: Great Debate: Will Netflix emerge from its big collapse a long-term winner?
ATV2 Supports Netflix out of the box
Good enough
titles, titles, titles
RE: Great Debate: Will Netflix emerge from its big collapse a long-term winner?
Too much competition
With VUDU and Movies on Demand from the cable companies there is almost always something I legitimately want to watch. At one movie a week, it is more expensive than Netflix, but mostly higher "value per dollar".
And Netflix really hasn't shown that they CAN improve that selection. The studios want them to fail and will charge them through the nose. And they have lost the good will of the customer in a big way. No scrappy upstart "fighting the man for you" status any longer.
RE: Great Debate: Will Netflix emerge from its big collapse a long-term winner?