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If you recall, there was one fateful summer when (G)Reed Hastings, CEO of Netflix, pulled a couple of scams on his cash cow customers in 2011.
First, he raised prices for customers across the board an outrageous 66%. Then, he foisted a new DVD-only service called Trickster (oops, I meant "Qwikster") onto his new and existing customer base, forcing them to have two separate accounts if they had both streaming and DVD services from Netflix. Both of these avarice-laden ideas hit the fan and drove the Netflix trading prices way down, and ignited a firestorm of invective on the Internet as Netflix users reacted exactly the way Hastings should have expected. He released commentary that he believed justified the drastic price hike, but no one was buying it. His company was already in the black financially, so it just seemed like a Greed-y move to all the people who were expected to pony up a lot more dough. Common sense would dictate that a CEO who actually cared about his customer base would have made concessions, but no. The price hike remained until the next one in 2014. The ill-fated Qwikster was abandoned after a month, but Hastings got what he wanted in the first place: a segregated user experience. Which is to say, you only needed one account to have both streaming and DVD, but lo and behold, you could no longer look at streaming video information if you only had the DVD service, and vice versa. This of course would nudge people toward doubling their monthly payments in the interest of being able to see the reviews for all movies in the Netflix universe, both streaming and DVD. The truth of the matter in 2011 is that the price hike was due to Starz announcing their decision to take away all their content from Netflix starting in February 2012. It was a lot of content, leaving a gaping hole in Netflix offerings. Add to that Disney's decision to start their own streaming service, and Netflix was facing a leaner period as it negotiated new contracts with additional production companies. In keeping with Greed Hastings's historical modus operandi, he's stuck it to his customers again, this time with the review feature. Since anyone can remember, Netflix included the very handy ability for customers to write reviews on movies they've watched. While some viewers' bias would produce unhelpful one or five star reviews, most people were thoughtful with their ratings and comments, which meant the system was an extremely useful way to vet what you wanted on your movie queue list. I'll go so far as to say that it was an essential tool for most Netflix users, because there are so many movies available, you have to have a way to avoid the dross in order to prevent time loss on a crappy movie. This time around Greed began his sweeping change with small increments that he hoped would cover the real reason he removed the entire rating system. He began by yanking out the star rating system, but leaving the ability to write reviews. This was of course unacceptable to almost all Netflix users, who used the rating system to sort their movie queues. This was step one. After a lot of flack, Greed put the star system back. But just like "The New Coke," Hastings was merely paving the way toward his ultimate goal. Step two was his introduction of the lame thumbs up/thumbs down system, which was supposed to replace reviews by "simplifying the process." Then finally, step three was his original plan: completely rip the entire rating/comment system out of Netflix, which happened last year. Now... here's the important part of this essay: Greed's official explanation for removing the rating/review system was "declining use." If you poll any group of long time Netflix users, you'll find that his explanation is a complete and utter lie. This begs the question: then why did Greed Hastings risk angering his customer base by instituting such a drastic change in useful features? That's an easy one, but you'll never hear Greed nor anyone in Netflix admit it: Netflix does not generate revenue by member fees alone. They also have arrangements with production companies that agree to have their movies streamed on Netflix. I of course wouldn't be privy to specific details in any of those contracts, but I can guarantee you that just like the radio, the production companies' bottom lines are affected by how many times a movie of theirs is streamed. As I recall, and forgive the anecdotal quality of this recollection, but about two years or so before Greed tore the review features to pieces, I noticed there were a lot more crap movies being released than previously. There was always crap, there will always be crap, but there was noticeably more crap than usual back then. So do the math. Crap movies meant crap reviews, crap reviews meant less views, less views meant lower payments to the production companies. This of course pissed off the production companies, who told Greed if he didn't do something about it, they'd just take their movies and hand them to a service that did a better job promoting them. Now it's all starting to make sense, no? Back to the present. Greed's attempt to cover for his blatant disregard for user experience was to institute the lame binary thumbs up/thumbs down system. But get this: you can't actually see the amount of thumbs up or down for any movie, like you can on a YouTube video; instead, you're supposed to trust that Greed's algorithms are going to accurately pick out new movies for you to watch, allegedly based on your preferences. Could it be that new movies suggested for you with this new system are slightly tainted by including some crap movies from complaining production companies? Nah. Greed Hastings wouldn't do anything like that, right? |