I talked at length earlier this week about how Netflix continues to shoot itself in the foot, and this latest revelation — that it’s in talks to bring the canceled “Terra Nova” to its service — is no exception.
Netflix’s biggest problem right now is not the price increase and an attempt to spin off its DVD-by-Mail service that so catastrophically sunk its stock price last year, Netflix’s problem is that they are going the wrong way. The world is moving away from bundled cable programming and its $100 monthly subscription cost — complete with 75 channels we don’t want or need — and toward services like what we want from Netflix: A la carte options for television and movies. Unfortunately, Netflix wants to be the next HBO. It wants to be another cable channel. It wants to be another option on your cable box.
In fact, Netflix CEO Reed Hastings envisions a future in which Netflix is 40 percent original programming; Hastings isn’t worried about losing the “movies and TV shows that people signed up to Netflix to watch in the first place.” The problem here is two-fold: While many of us are excited that Netflix will be bringing new episodes of “Arrested Development” to its service, we’re less excited about its slate of other original programs (I have not seen “House of Cards” or “Lilyhammer,” but there hasn’t exactly been a lot of buzz around those shows).
If you take cable into account, there actually is plenty of great original programming to fill up our hours already. We don’t want to watch a bunch of new shows on Netflix, we want to watch FX, Showtime, HBO, and AMC shows on Netflix. By moving away from that model, Netflix will necessarily limit our choices again. We want to cut the cable cord. We want one place to get all of our television viewing needs; we don’t want to be forced to keep cable AND subscribe to Netflix so that we can get their new programming as well. A move like this doesn’t make television cheaper, it makes it more expensive: Now, to see everything, we have to subscribe to cable, Netflix, and Hulu (which is rolling out its own original programming, as well), and supplement that with iTunes and YouTube downloads. Netflix was supposed to combine all of that into one service, not add on to our woes.
I understand the strategy. Netflix is at the whim of other networks right now; to succeed, it has to pay out the nose to license shows from HBO, Showtime, FX, and AMC. Maybe that model is not sustainable. But by moving toward original programming, the consumers are at the whim of whoever chooses Netflix programming. I don’t want to pay $10 a month to be at the mercy of a guy who chooses to waste part of my subscription fees to pick up “Terra Nova.” I want to pay $10 to watch anything I might have missed elsewhere. Netflix’s competitive advantage is its selection, but the good options on its streaming service, Instant Netflix, are already dwindling. They shouldn’t be shelling out money for new programming — which then needs to be marketed and advertised — when they could be licensing established programming that has its own word-of-mouth audiences.