Thursday, July 14, 2011

Netflix running this game now.

     Several years ago I saw an ad for this upstart company. They promised any movie available and would even mail it to you. No late fees and you could build your own wish list so a movie would always be ready to send. Obviously, the company was netflix. The little guy wanted to take down the giant that was blockbuster at the time. Everyone had a membership at blockbuster and that was how you rented movies.

     Now as netflix grew, blockbuster decided to ignore all the signs of a coup by its customer. Charging high return fees, limited release, and market saturation was the norm for blockbuster. As all these items rose for the company, more and more customers began to look at other options like netflix. In the end, the business model blockbuster had in place was antiquated and by the time they noticed it was too late. Netflix had established a devoted customer base, all blockbuster could do was wave the white flag.

     Wonder why I am bringing this whole well known story up? Mostly due to the lovely increase netflix has bestowed upon its customers. The second reason is I see history repeating itself. I'm watching a company increase rates and jerk customer's around for a higher profit margin. Blockbuster did the same thing with their late fees and netflix jumped on them with no late fees. With roles reversed and netflix in blockbuster's seat, redbox is the upstart that may bring them down a few pegs. In a time when ever dollar counts, jumping prices to the tune of 60% on some folks opens the door. Myself.personally, I walked away from netflix years ago and haven't looked back. With the price increase, there may be a few more that may do the same.

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