Ugh. Ugh I say. What has rendered me monosyllabic? Before I rant please read the following paragraph pulled from an online piece about Netflix's stock and revenue performance and why Netflix's growth is slowing down:
Netflix prospects are being hurt by internet delivery of premium content through websites like Hulu, but, people are also going back to theaters to watch the movies. A Netflix subscription is $8.99 a month, which in a recession is a fantastic bargain. A subscription allows nearly unlimited access to DVDs by mail and TV-viewed movies. A movie theater ticket for single show can cost more than an entire month of Netflix. The trouble with Netflix is that people have to watch the content in their homes. A large part of the population never took a liking to the model, and now those people, and many others, can once again spend the $15 it costs to sit in a real air-conditioned movie house, where the cost of the popcorn is often more than $10. - How The Movies Killed Netflix - 24/7 Wall St.
Is "the trouble with Netflix" really "that people have to watch content in their homes?" Of course not. Business and media analysis aside, no layman would utter this aloud. Between cable, VOD, online options, and yes rental (via Blockbuster or Redbox) home entertainment continues to be huge. People like watching movies at home. It's why Blockbuster became BLOCKBUSTER. This is one of those pronouncements people are pulling out of their ass that irks me.
Business and media analysis applied, people going to the movies is good for Netflix, and will remain so, as audiences are much more likely to recommend and rent movies they've seen in the theaters. Nearly all the top rentals each week correspond to movies that were in the top 5 theatrically for their respective opening weekend. Netflix also benefits greatly from studio advertising as every studio film--with exceptions--will be on DVD. Few businesses get to draft off someone else's advertising like the video rental business does and has. Then there's these things that seem to be missing from this post:
- Netflix has no destination component forcing audiences to choose between driving to a brick and mortar store or driving to a theater.
- The either or choice is an illusion with Netflix. People come home from the theater, they can still watch that movie that came in the mail, or catch any number of streaming flicks. See a movie in the theater Friday Night, see something at home on Saturday.
- Choice and availability. No matter how good the offerings are on any given weekend, there's still only, at most, a few dozen selections one can catch at their local theater. Even if people want to go the theater more, they still have to find a film they want to see.
Netflix is not Blockbuster. As I've mentioned, Netflix doesn't have brick and mortar stores to contend with. They don't have Blockbuster's history of battling customer dissatisfaction. They've also been way ahead of the curve in online streaming, with one of the best online players, and partnering and investing in consoles like Xbox and Wii, and home devices like the Roku. Netflix will probably be here in 20 years. Blockbuster? Unless they truly tear up their gameplan and actually come up with some solutions and stop chasing everyone else (Netflix, Redbox, whoever else will pop up next week), they'll be lucky to make it another five at the rate they've been going.
As far as theaters stealing Netflix's thunder, that's all bull. The slow down in growth is simple, the economy is still sh*tty and people are opting to cut back. End of story.
...Oh and streaming will not "probably be the “next big thing” in the movie and TV business." It is the thing.