As a company that has excelled in bridging the gap between yesterday's optical discs and tomorrow's streams, Netflix (Nasdaq: NFLX) isn't usually prone to blunders.
The flick flicker isn't perfect. There have been site outages and ill-advised media plants. The throttling allegations will never go away.
However, there's usually a logical explanation. Throttling protects loyal yet infrequent renters. Other times, third parties are easy scapegoats. The extras brought in to play interested locals during Netflix's Canadian media exhibition were never supposed to get chatty with the press.
However, last night's blunder is all Netflix.
"We're removing the Add to DVD Queue option from streaming devices," explains product manager director Jamie Odell in Netflix's official blog yesterday. "We're doing this so we can concentrate on offering you the titles that are available to watch instantly. Further, providing the option to add a DVD to your Queue from a streaming device complicates the instant watching experience and ties up resources that are better used to improve the overall streaming functionality."
Netflix may have chosen a holiday to dump the head-scratching news on its subscribers, but it's not being ignored. The typically quiet Netflix blog attracted more than 200 responses yesterday, largely criticizing the move.
The move is ridiculous. Netflix has been an early adopter in streaming convergence. It was snapping up deals with Microsoft's (Nasdaq: MSFT) Xbox 360 and TiVo (Nasdaq: TIVO) to stream through those web-tethered set-top appliances during the streaming revolution's infancy. When Apple (Nasdaq: AAPL) rolled out the iPad this past April, Netflix was the most popular third-party app at launch. Netflix then followed that up with an iPhone-streaming app and a commitment to allow streaming and queue management on as many smartphones, tablets, and set-top devices as possible.
Why can't someone add a disc to their queue from any of these devices? Why can they only do it from computers? After all, the most logical time to add a disc to an active queue is when a subscriber finds out that it's not available for streaming. Removing this obvious queue management feature adds insult to injury. Nope, Netflix doesn't have the movie you want in its digital library to stream your console, smartphone, or tablet. Fire up your laptop if you want to put in a request to see it eventually.
Netflix can't afford to get cocky. Apple and Amazon.com (Nasdaq: AMZN) rentals are cheap, and usually cover the new releases that Netflix doesn't have in its streaming catalog. Amazon is also rumored to be working on an unlimited service bundled with its Amazon Prime loyalty club.
CEO Reed Hastings may sit on Microsoft's board, but don't put it past Mr. Softy to stay out of this niche if Netflix's 16.9 million subscribers grow frustrated with the service. This also happens to come at a time when Netflix rates are inching higher, making it a peculiar time to make it more inconvenient for members to add DVDs and Blu-ray discs to their queues.
This is the second time in three months that Netflix lays the blame on "resources" that seem to be in short supply as if we're talking about rare earth elements.
"Creating the best user experience that we can around watching instantly is how we're spending the vast majority of our time and resources," Netflix noted in November, justifying its decision to not offer a DVD-only unlimited plan in its rate-hike announcement.
Maybe it's just me, but shouldn't this month's rate hike justify beefing up said resources? Don't blow it, Netflix.
Is this a dumb move by Netflix or no big deal? Share your thoughts in the comment box below.
