Why Netflix’s Bad Decision is Bad for Indie Film

Sure, I was annoyed a few months ago just like everyone else when I heard about Netflix's 60% price hike. But when I first started using Netflix almost ten years ago, it was just to get DVDs in the mail. Several years later, I streamed the first "Watch Instantly" content on my laptop, which was an exciting new curiosity. Now I regularly stream movies and TV shows right to my TV through my internet-connected Blu-Ray player, and it's hard to imagine the future (and present) of home entertainment without having access to this feature. So, the prices have increased, but the functionality has increased as well. I was not super excited by the prospect of paying 60% more for the exact same service I've been getting, but I understand it. Netflix wants to increase its selection of streaming content (which, is undoubtedly the way of the future), and licensing more and better content will cost more. I understand that, and was willing to pay the new higher prices for a service (ONE srevice) I considered invaluable. But Netflix's new shocking announcement that it is dividing its streaming and DVD services into two separate companies ("Netflix" and "Qwikster", respectively) makes me have to reconsider whether either of these TWO services is actually worth paying for at all.

Misguided Netflix CEO Reed Hastings

The problem is that my Netflix experience (and, from what I've gathered from other reactions, that of many Netflix customers) is highly dependent on access to BOTH streaming and DVD content. Of course my preference is to stream content -- who wouldn't prefer to watch high quality streaming video instantly, without worrying about DVDs that might arrive scratched and unplayable or get lost in the mail? But the vast majority of movies that I am actually interested in watching are not available for streaming, only on DVD. This will likely change in the future -- as studios realize that more and more people prefer the convenience of streaming and no longer rent or buy DVDs, they will have to start licensing their premium content to streaming services like Netflix -- but it's very much the case NOW. And the recent announcement that Starz will no longer license its streaming content to Netflix makes the short-term situation worse, not better.

With Netflix's current service, this is not such a big deal. I don't mind waiting a day or two for a movie I really want to see to arrive in the mail, and the streaming selection is varied enough that I can usually find something entertaining to watch instantly in the meantime. My current Netflix queue contains 102 titles, 16 of which are available for streaming. So I can certainly find something I want to watch instantly, but the streaming is obviously no substitute for the DVD selection. Basically, the whole process is like going to a video store and being told, "I'm sorry, we don't have that title in stock at the moment, but we can order it for you. In the meantime, would you like to entertain yourself with one of the selections we have on our shelf?" The new Netflix will be more like going to a video store where you are constantly told, "I'm sorry, we don't have that." Which is a better experience for the customer?

Clearly Netflix is working toward licensing more and more streaming content, as its recent deal to stream programs from the Discovery Channel and Animal Planet shows, but it's not necessarily the content that subscribers signed up to watch in the first place. After all, it's called Netflix, not NetbasiccablerealityTV. Besides, for anyone who really cares that much about watching Animal Planet, there's already a way to stream it instantly to their TV. It's called Animal Planet.

The streaming service by itself hardly seems worth it, since most of the content you probably want to watch is not available. The DVD service by itself is of questionable value as well, since it is not convenient. Subscribing to both services, while it will cost the same as the current Netflix (increased) price, will not be convenient because the two queues will not be compatible. You will no longer be able to look up a title, stream it if it is available and order the DVD if it is not.

My fear is that many people who are put off by the inconvenience and cost of subscribing to a separate DVD by mail service, will just drop it entirely, and choose to only watch whatever content is available to them instantly via streaming services like Netflix and Hulu. Unfortunately, many films, especially small indie films, are currently available only on DVD. Without a service like Netflix, with a large DVD selection, audiences will have no access to these movies at all. Due in large part to Netflix's success over the years, many video rental stores and chains have gone out of business, and most of those that remain carry a very limited selection consisting entirely of new releases and Hollywood blockbusters.

In the past, when people have asked me if they could see any of the films I've shot, I could say, "Do you have Netflix?" The majority of the time, the answer was yes. A few months from now, if I respond to that question with "Do you have Qwikster?" I have a hard time imagining the answer will be the same.

As an indie filmmaker, I often find myself wanting to watch other indie films, either because I've heard good things when they were on the festival circuit, out of professional curiosity, or sometimes because I might have a potential job with one of the filmmakers. Invariably, the only way I can find to watch these movies is by adding them to my DVD queue on Netflix.

As someone who works in the business, such a service is valuable enough to me that I will most likely continue to pay for it, either through "Qwikster" or one of its competitors, until the streaming selection can compete. But I shudder to think what this will mean for the larger audience that is not as committed to indie film as I am. By taking away the option to order the DVD of a film that is not available instantly, Netflix is potentially making an indie film's small audience significantly smaller still. It is potentially making one of the few major distribution options for these films even less viable, and without that DVD audience they will become even harder to see, and therefore, if that continues to be the case, less likely to get made.

But maybe I'm wrong. Maybe current Netflix subscribers will flock to Qwikster or a competitor like Blockbuster. Maybe there is even a silver lining here. Amid all the recent uproar about Netflix's price hike, I'm surprised I haven't heard more about this, but in recent years I've noticed that Netflix's DVD service itself has gone way downhill. There was a time when any movie I wanted to see was available on Netflix. And if it wasn't, there was an option to recommend the that Netflix add the title to its library. This is no longer the case. Not only is that option gone, but the DVD selection has diminished as well.

Several titles that were once in my DVD queue, are now listed as "Saved DVD" with "availability unknown". I was listening to a DVD commentary recently that referenced the film "Ordinary People." I realized that I had never seen it, so I logged on to Netflix to add it to my queue. Much to my surprise, the DVD was listed as "availability unknown". This is a movie that won four Oscars, including Best Picture, in 1980 -- not some obscure indie film. There is no reason that the DVD should not be available. So far, two of the features I've shot have been released on DVD, "The Big Bad Swim," and "Goodbye Baby." However, Netflix carries only one of them, "The Big Bad Swim" (and only on DVD, so soon it won't carry that one either). But I happened to notice that Blockbuster carries both "The Big Bad Swim" and "Goodbye Baby" on DVD and they can both be rented through their DVD by mail service. After a few more minutes of searching, I realized that many of the titles in my Netflix "Saved DVD" queue were available from Blockbuster as well. They even carry "Ordinary People."

So maybe, just maybe, by being forced to take another look at their DVD watching habits, Netflix subscribers will realize that there are actually other games in town and sign up for the DVD by mail service with the best selection, rather than the one that was convenient because they were already subscribed for the streaming content. Or, even better, maybe the streaming services like Netflix, and content providers and studios will now start reaching licensing deals much more quickly and before we even start missing the DVD, we will have instant access to "every movie ever made in every language, any time," just like we were promised by that old Qwest commercial. I don't think it's likely, but who knows?

[Update: Netflix has announced that they are scrapping the plan to spin off their DVD business into a separate company, so please disregard this post.]