Netflix chief content officer Ted Sarandos says the company ran into trouble today with its forecasts for streaming video and DVD rental subscriptions because it’s still adjusting to the decision in July to turn them into separate products. “Being able to precisely forecast and predict the behavior of that many people on a fairly radical change is something we’ll get better at all the time,” he told an audience today at The Paley Media Center. He said that while ”it was a sexy headline” to report that the change in Netflix’s offering increased the price of the combined streaming and DVD service by 60%, “that was only for people who chose both.” The number of people taking both services will dwindle. Although “the DVD business has a long life in middle America,” Sarandos says “it’s just not part of our future.” That’s shifted Netflix’s focus to television shows instead of movies. The exec says that lots of consumers also are becoming more interested in the tube as production values have improved. “TV feels more like mini-movies,” he says. But events such as the fall season premieres are becoming less important to the public. “If I really love a show, the first thing I want to do is watch the next episode. Having to wait a week is pretty frustrating.” But Netflix is content to air series — not special events. “We have no sights on sports, or American Idol, or talk shows, or The Daily Show.”


“We have no sights on sports, or American Idol, or talk shows, or The Daily Show.”
Not in the industry but I’d like to just say something about this quote.
SOMEONE TAKE THIS OPPORTUNITY AND RUN.
A Hulu for sports? My oh my…
Is there anyone at Netflix who can make a statement that doesn’t make me want to cancel my remaining plan?
I completely agree. And did he really say “the DVD business has a long life in middle America.” Middle America? What the 2 coasts aren’t interested in DVD rentals? WTF does that mean exactly? It sure sounds condescending.
I completely agree with you two.
It’s like they’ve all the sudden gone from hugely customer friendly to utterly tone deaf. As a member of coastal America who is offended when the rest of this great country is derisively referred to as “flyover states”, I cannot believe he used the “middle America” drivel. Seriously, what the hell happened there?
re “TV feels more like mini-movies,” he says.”
Hilarious. That’s his take after they lost their studio feature film biz b/c they can’t afford the licensing? Mini-movies. You know what else is like mini-movies? Short films. Youtube content. Etc.
These guys were arrogant as hell, and the crash is exactly what they deserve. The stock (and company value) are in Free-fall. Going down like a wounded bird.
Exactly! They’re trying to spin the fact that they can’t/won’t make the deals with the studios to offer new releases. LAME attempt at misdirection. With so many outlets for digital distribution – from on-demand cable to iTunes, Amazon and on – Netflix is being hit by premium licensing costs and backing down. Insulting that they’d try to masquerade it as consumer choice. Bah!
Netflix needs a plan – but to have a plan they need planners and this group seems to lack both! I smell “Revamp”!!!
“Although “the DVD business has a long life in middle America,” Sarandos says “it’s just not part of our future.” ”
In other words: the one thing we do better than anyone else is the thing we’re planning on eliminating. Netflix’s streaming library sucks, but their DVD selection is superlative. If they eliminate that part of their business I’m gone.
This cinephile who lives in Minneapolis renewed her sub with Netflix in spite of the price hike and BECAUSE of the DVDs. If they don’t deliver on why I signed up for them in the first place watching DVDs to have access to the commentary, subtitles, special features, as well as the films not available elsewhere–they will lose a larger swathe of their market than they realize. F***wads.
It feels to me that Netflix is trying to move the market to what they want their business to be, as opposed to responding and adapting to the market that exists and I think that strategy will ultimately fail. Netflix needs to give people what they want as opposed to trying to make people want what Netflix wants to sell.
Bingo. Great post.
With a selection like SOMEBODY HELP ME 2, BIRDEMIC: SHOCK AND TERROR, ANGELBEATS!, UNZIPPED, DESERT SAINTS, etc., it’s clear that Netflix is focused on being the industry leader in providing their consumers with premium (even decent would do) content. What a joke!
Zarko, I think you hit this one right on the nose. In all likelyhood though, it’s half due to Netflix’s arrogance and half due to extreme difficulties that they will have with acquiring film rights for streaming. Even for TV shows, they will likely encounter problems soon for the high demand properties because syndication revenue may be affected.
Jeez apparently nobody outside of Netflix can do any math:
Today’s news means a hit of about 3% to their revenue prediction, which means they will only make up to 28% MORE than before.
If you can raise prices by 60% and at the loss of 3% of your subscriber base … then you are an idiot if you don’t do it.
Those same idiots will probably be buying the stock when revenues greatly exceed expectations.
Yes, but the 60% price increase is only if you subscribe to BOTH DVDs and Streaming. If you only go with one, then the subscription price paid by the customer actually went down.
Wow. Just wow. Thanks for the heads up Ted. Its not that I havent been able to tell Neflix lacks commitment in the DVD movie business recently but now that you have laid out your future plans I will be cancelling my DVD sub and moving it to Blockbuster, even though they are a couple bucks more. As far as TV shows goes Ted, I already have a little thing for that called Tivo.
Remember – Netflix Execs ALWAYS LIE. They never tell the truth. This has been going on for years.
Sad… Netflix is moving into “out-of-touch has-been entity which keeps struggling to reinvent itself and fails constantly” mode.