Why Netflix is smart, haterz is stupid

For the life of me, I can’t quite figure out what people are so upset about Netflix’s move to separate their streaming video and DVD rent-by-mail servicesTalk about First World problems. Sheesh.

To those people who are whining because it may cost them more to rent movies, or cause them the inconveince of having two separate accounts—one for Netflix and one for Qwikster—I say, “Tough.” Go back to what you did before Netflix was around. What’s that you say? Right, you don’t want to. Because Netflix has entirely changed the way you acquire your little entertainments and you like it the way it is now.

But they invented the way it is now, not you. So they get to change it and charge more for it if they want to. Lots of people are already voting with their wallets. Either join them, or start your own company to revolutionize the market all over again. But please shut up.

To those people who are insisting that Netflix is making a poor business decision, I haven’t heard one valid reason why. Yeah, maybe they made the move in a ham-fisted way. Yeah, maybe they should’ve checked to see if the Twitter handle was available for their new brand.

But what they aren’t doing is following what I call the Slim Pickens’s Business Model:


Remove Slim from this picture and substitute the heads of the recorded music business at the dawn of the digital music revolution. This was their model: ride the fucker into the ground until the whole business blows up. This is the classic boardroom response to disruptive business models: stall, delay, sue, lobby—do anything but innovate to preserve your current income stream, even as it slows to a trickle. Then, BOOM! When reality finally hits, start grabbing for the scraps of what’s left. Ask Blockbuster how well this strategy worked when Netflix came along.

I ADMIRE what Netflix is doing. They are looking past the next quarter and the next fiscal year. They are inflicting short term hurt on themselves to focus on the long term. They are a disruptive business that sees major disruptions headed their way. And they understand that it’s better to be disrupted sooner rather than later.

Only time will tell if Netflix is really making the right move. But I say it’s better to jump off the bomb before it drops.

Here’s a good take on the issue from someone who seems to actually know what he’s talking about:

SplatF: 10 things to remember about Netflix while scratching your head about Qwikster