Wednesday, September 21, 2011

Giving Away Their Power

Thinking more about the Netflix issue (not the most important thing in the world), it's puzzling that they'd basically announce their intentions to degrade and abandon the thing (dvd by mail) they a) have significant market advantage in and (more importantly) b) the thing that gives them power over the content providers due to the first sale doctrine of DVDs. Basically, before they'd go to content providers and essentially say 'give us streaming rights and we'll split all the savings we'll have from not having to deal with physical inventory and mailing.' Now they'll go to the content providers and beg for the privilege of outbidding amazon or whoever. There are large barriers to entry for a quality cost effective DVD-by-mail system. The only real barriers to entry in internet streaming involve cutting content deals, giving the providers all of the power.

Also, too, pissing off your customers and making a shittier product.