Netflix recently reported the first quarterly customer loss in the company’s history a couple of days ago. An article in the San Jose Mercury News ascribes the decline to Blockbuster’s rival service which is marginally cheaper and offers customers the option of returning their DVDs at their nearest rental store. Netflix plans to respond by improving customer service and reduce its prices marginally.
Not that Blockbuster is doing well. According to the same article –
(Blockbuster)..lost $49 million in the first quarter. Blockbuster last month indicated it might try to reverse that trend by raising the prices of its online service.
While these rental giants are battling it out, they may be missing the technology changes happening right before them. The need they fill, as I see it, is three-fold-
– New movies just out on DVD
– episodes of popular TV shows
– hard to find foreign films.
As a consumer, I get all my new movies from the pay-per-view service on TV. This may be slightly more expensive than renting the DVD, but it gives me the quick fix of the movie I want, when I want. TV shows are harder to find but Joost is busy making deals with basic cable channels like FOX and thanks to mobile technology and the video iPod, show producers have woken up to the revenue potential of the Internet. Latest episodes of popular shows are already being offered on the websites of basic channels like ABC and NBC.
That leaves the classics and foreign language films. Admittedly, Netflix has a phenomenal collection but companies like Jaman, which offer online downloads and rentals are grabbing the long tail and inching forward. There is also a social networking component that adds value to the viewing experience. Once studios get over their piracy paranoia and get comfortable with regulated rentals and sales over the Internet, the floodgates of online movies should open.
At least, that’s my hope. As a fan of films from India, I am particularly frustrated. The DVDs I purchase rarely survive more than 3 viewings. After that it is a merry game to figure out the story between skips. I have started hoarding my ‘Kaagaz ke Phool’ DVD knowing that it has only one life left.
All this presupposes that the DVD will actually work. My fussy ‘Made in Japan’ player has rejected several films for not being ‘in the Zone’. For the $19.95 that the DVD typically costs, it hardly seems worthwhile.
As for the few foreign films I own, exactly how many times can you watch the ‘Godfather Trilogy’? Surely we can feel the same pride of ownership in a file name?
The imperfections of the market and the unavailability of broadband connections may keep the format alive a little longer. But it’s just a matter of time. So before you invest in the ‘Star Wars’ 6-pack for the price of a small car, think about it. Someday soon it may be bye-bye DVD, hello download.