What Happens with Netflix?

This is what everyone sees: Netflix has fewer subscribers, plummeting stock price They lost big money in the 1997 to 2002,, but since 2003 , they shot up with spectacular profits year after year. There was a roller coaster from about $20 a share to $250 in 2011 first half  a cool drop to $155 in just weeks after September 1, 2011.

The challenge is how Netflix will stop the share price drop? Is it stoppable?

I have many friends and acquaintances in Netflix. I see them  in meet-ups, at Structure 2011 show. They are rather inebriated with success, and techie talks by Adrian Cockcroft can attracts more than 600 people. They love the rock-star metaphor; after all they invented the movie streaming technology, running on AWS, when Amazon was never designed with this end in mind

The other day an executive from Online.com explained me their business: “We stream games as Netflix streams movie” . Netflix created the standard for streaming something over the Internet. It is an impressive technology. Everything they do has logic, like A/B and Hadoop testing to determine the taste of the subscribers.

But technology can not make successful a movie streaming service. People see movies and they don’t give a damn about the science behind. A crap movie seen in 3D it is still a crap movie. A crap movie with clear reception no one will order anyway.

This is my experience, as I had the most expensive subscription to Netflix, as movie buff . The Blue-Ray DVD mailings deteriorated. This is what Netflix did best in the first years. Many DVD came broken or scratched, as the focus on streaming heightened . One returned DVD get lost in the system, and I could not order DVDs for months in a row. Finally I gave up and I subscribed for streaming movies only.

I like having access to foreign movies, like French, but I am atypical in America. No more really new releases on Netflix streaming. For example Woody Allen “Vicky Cristina Barcelona” is available from Netflix only via DVD, but Amazon has it for instant video Sure it is more expensive per movie on Amazon, but it offers an instant gratification. Even old classics, like Casablanca, one must order a DVD in Netflix

IMHO #1,  Netflix can emulate Amazon and offer all recent video released titles at individual prices for instant streaming. They can offer “Vicky Cristina Barcelona” as instant video and charge a nominal fee. The customers who do not want to pay, still have the option of one DVD a month.

I am grateful that Netflix has a great collection of Indie movies, like Arranged. But one cannot see up to date releases of French, English, German and East European movies. The horror movie from Romania  “Strigoi. The Undead” is on Amazon, but not available at all on Netflix.

Most annoying is the lack of captioning on Netflix’s  streamed video. Cohen brothers True Grit where all characters mutter an indistinguishable words in a thick, over-exaggerated Texan accent, must have captions even for my native English daughter.

IMHO #2   Please add option to see recent video releases in Europe and charge for it in US necessary. Different markets will pay different prices

IMHO #3 Please add captions to all streamed movies. Charge 50 cents to 99 cents more, if required

IMHO  #4. Refine your Hadoop clever algorithms, as they are just a machine, and just code. They can lead to inaccurate (not to say stupid)  conclusions. As my son and daughter use the account, their go into the Cassandra Data base and. I get as recommendations to see Power Rangers, Thomas the Train Engine or Princess Diaries

Success is not rooted in the technology. Success is rooted in the people desires to pay for entertainment delivered in their homes. Once the streaming technology has been developed, and here Netflix has a big merit, it becomes like generic drug. Anybody can use it at lower and lower costs. It is no longer a differentiator. The content and pricing of the content are the differentiators now.

Can Netflix make it? If they focus to hire more carbon-copy engineers, selected by the existing engineers  who believe in the God of noSQLdata bases and to a lesser degree in God, they will not make it.

And another idea I promote for few years, Netflix must seek an alternative to AWS public data center model. Speaking about online.com, the have their own servers in co-located  Data Centers all over the world, and this way they can stream games

As Netflix likes to quote, there is no certitude, there are only opportunities Netflix will react. I hope with humility, as without humility, one looses the gift of prophecy