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Recent Netflix Developments Illustrate A Crossroads In Conspumtion

September 19, 2011

EDIT: More perspectives on the new move from The Atlantic (How Does Netflix Possibly Survive?), Slate (Is Netflix As Dumb As It Seems?), and Wired (8 Netflix Alternatives Compared).

Netflix’s recent price hike, dubbed a “bonehead move” by The Atlantic’s Daniel Indiviglio, brings the issues of modern media consumption to the forefront of national dialogue, just as iTunes and  e-readers have done in the recent past. On the one hand, many of the considerations made when determining how to consume media have been hashed out before. On the other hand, movies represent a somewhat unique form of media–one in which immediacy is more universally desired.

Records, especially ones that a listener has anticipated the release of, are consumed continually. There is usually a period of several months when a newly purchased record remains in a listener’s rotation. Repeated, consecutive listening (or consumption if you’d like), is built in to the definition of a product. This aspect of music makes it more likely that a consumer will invest in a record, because it carries more weight in this way. It’s true that the record industry has all but collapsed in recent years, but mp3 singles and streaming internet services can only do so much to replace the record as a whole product. Those who value entire albums are essentially faced with two choices: purchase, or steal. Given the increased market saturation of cheap(er) mp3 downloads and the tendency for record consumers to care more anyway, the clear choice, especially in cases of artist loyalty, seems to be “purchase.”

Similarly, books are products that are continually consumed over a semi-extended period. We sit with them, we digest them, we set time aside for them, and the books we read color our lives for the duration that they are read. It is easy to understand why the niche market for book-lovers would care more, and therefore (again, especially given the increased convenience and relative cheapness of e-reader books, not to mention used books online) purchase them.

Movies would not seem to share in this kind of model. Sure, we may re-watch movies that are dear to our hearts. For most, though, this collection of “re-watchables” is comparatively small. (Not to mention the duration between viewings is likely to be much longer than the duration between listens of your favorite album.) For movie consumption, the value is not found in the potential for repeated consumption, but rather in how quickly we are able to consume. When a new movie comes out and it looks interesting, we want to watch it at the soonest available opportunity. We make consumption choices in terms of how to do so (theater, DVD, streaming, wait for a friend to rent it, etc…) based on how strongly the movie appeals to us, and how strongly our groups of friends share our interest. When faced with various options for consumption, it is through this desire for immediacy that we can more easily understand the choice to “steal” a movie, rather than purchasing or renting one. Why wait, hoping the movie you want to see will appear in a Redbox, (which is swiftly becoming the only cheap renting solution left in America, regardless of its insanely limited selection), when you can download the movie in an hour or so? Only when purchase or rental reaches the kind of balance that cheaper, easier music and cheaper, easier books have reached, do the scales tip in favor of purchasing.

Until recently, Netflix represented this balance. The low, flat rate and the options for consumption between streaming and mail order combined to create a format that changed the entire movie industry. Netflix was also unique in that, as opposed to music and books, it was the only service built on such a model.

Since Netflix’s “bonehead” price hike, the company has lost 26% of its value.[1] Additionally, the recent loss of a contract with the Starz network has meant a sizable decrease in the already anemic selection of streaming content, once touted (rightly) as the “future” of the company.[2]

In an age where Netflix had come close to offering a cheap alternative not only to movies but to television itself, these recent developments are clearly a step in the wrong direction. More interesting than this, however, are all the implications present. How will this affect consumption behavior? Has stealing movies or streaming TV shows on Hulu become enough of a viable option to replace the services that Netflix once provided? In an age where media industries seem to reform themselves every few years, will consumers finally win the ability to pay reasonable fees for the content they want, or will archaic entities collectively refuse to give up the insane profits they’ve grown accustomed to, forcing models of consumption where we pay too much for what we don’t want? Will this refusal to change in effect promote the pirating of the very media they aim to profit from? And lest this read as an argument against bloated corporations, will such an ideal model for consumers be able to sustain the artists who produce the work?

These questions have existed for over a decade, especially in the realm of music, and while these recent developments once again recast issues of consumption, for now the only question that seems answerable is this: how has the Netflix change affected the way you watch movies, if at all?

EDIT: One day after drafting up this post (in other words, today), this happened.


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