Interesting read on The Motley Fool about Netflix today. It talks about another pending blow to Netflix and its future growth – bandwidth throttling concerns. Seems like most American’s get their internet from the local cable company. These cable companies are rapidly transitioning to primarily useful for delivering the internet and less so for the traditional TV and phone (which never really caught on) services.
The fear is that someone, somewhere soon will start to either limit or charge extra for high data downloads. Like the data downloads that streaming movies on Netflix uses. Therefore, Netflix is in potential trouble of losing customers if we can’t stream all episodes of Mad Men 24 hours a day.
Got me thinking, why do we even have Netflix? Don’t get me wrong, I’m a long time subscriber and plan to be for some time into the future. But Netflix is a middle, middle-man that is solving a problem that shouldn’t exist. Netflix doesn’t make the movies, they don’t host the movies, they don’t provide the bandwidth into your home, they don’t even make a device that ‘shows’ the movies.
Just what do they do then?
They are a simple, elegant method of connecting users with entertainment. I applaud what they have done and what they are continuing to do to bring me movies and TV Shows. They make the discovery of new shows super easy. I love saving shows to my watch list to remind me of the things I want to see in the future. I am loyal to them because they have a positive impact on my life. I don’t know or care who makes the movies I watch, but I know Netflix and care about Netflix.
So why are they even around?
Isn’t the ‘Internet Revolution’ all about cutting out the middle man? Aren’t we supposed to be getting to know the content creators in a close, personal relationship now? Isn’t Brand Loyalty supposed to be the end all of all marketing? Why is my loyalty to a middle middle-man then?
The studios have so far, completely missed the opportunity to make me a customer of their brand. I completely don’t care a whit about which studio makes the next Bond movie. I know the Bond name, not the studio name. Other than Pixar, I can’t name a studio that means anything to me. They don’t have a brand. I could care less about which one makes the next blockbuster that I want to see.
I think Netflix will weather the storm around bandwidth throttling just fine. As the article points out, they deal with that issue already in Canada. They would handle it in the US also.
If the studios ever pulled their heads out and got with it, Netflix would be in trouble. That is one of the worlds largest “IF” statements, however. They just don’t seem to understand the way the market is moving. They can’t keep the anchor down and expect the world to come to them.
What do think? Do you have any loyalty to a movie studio? Do you know of any? What about Netflix?
Matt Gorski 
The middle man returns your calls, emails you back, understand how important it is to keep a customer, and listens to the needs of the customer. The middle man stands on the sidelines and observes carefully what that loyal customer wants. I have known two people who work for Netflix, and guess what, they even care for their employees, at least the two I know..
The studio receives funding from investors in the “idea” of a next block buster. My opinion, they both need each other. The End
Great response. Believe me, as a customer, I want to be listened to. I just wonder why the studios don’t want to have that relationship to me, while at the same time, they fight the trend of the future of instant streaming? Either grant the relationship to Netflix and do what you can to support that, or take that on yourself. Either way, but pick one…