I’m not surprised that Netflix had to renege on their proposal to divide its disc rental website with their file downloading site (named Qwikster). Customers hated it…and why…because things were working just fine for them. There was no need to divide Netflix’s offerings for the customer.
So why did Netflix propose this?
In my opinion, I think it’s their business model…less physical merchandise means higher profits. A digital download costs virtually nothing to store on a hard drive vs a physical disc that needs to be wrapped, mailed and stored in real space. I believe that Netflix wants to wean its rental customers off physical discs so all their offerings are digital downloads…saving them cost but offering the customer less.
Why do I say less? Because the actual disc often has specials and director cuts of the movie which is unlikely in a single digital download. Then there’s the slow downloading speed which renders videos unwatchable because of inadequate speed or signal loss. Lastly, and I’m not certain about this, the downloaded file (if there is one) would possibly be a file format that is proprietary to Netflix.
What it boils down to is control and profits. DVDs are in a format that is not under the control of Netflix, play well on any computer, contain a lot of additional content and look good all the time. Digital files are not physical, can be controlled by the owner and subject to download conditions and cost nothing to view. It’s a win, win scenario for Netflix, not so for the customer.
Not everyone has fast Internet access. A cheap DVD rental plan is under $10 and considering free shipping both ways, even low income customers can benefit from this. A download only service would negate these customers.
What’s my proof? Well, I suspect it’s part of the pricing. Netflix wants to encourage its current DVD customers to switch to digital downloads by offering their digital files at a lower price. I (once again) suspect that the physical DVD offerings will slowly diminish and eventually not be an option. Score a huge win for Netflix, no so for the customer.
I have always thought highly of Netflix. The offerings were generous as was their customer policies. Now, despite the fact that they have a huge market share in rentals, it seems they have begun to get greedy. I hate to see this and consider it a downfall in their customer relations. Time will tell.