But rather than chronicle all the wrong moves Netflix has been making as of late, such as separating their streaming and DVD rental business into two Web sites and now backtracking on that decision (interestingly, in a letter not from CEO Reed Hastings as the other infamous letters were, but just from “Netflix”), let me offer the letter I think Netflix should have written to their customers in light of their recent price hikes.

One could argue the price increases were the wrong decision as well, but I’m not convinced of that.  In fact, I think there’s an argument to be made that Netflix did NOT, in fact, raise their prices.  This point will soon become clear.  Here is the letter:

Dear Netflix Customer,

As you know, Netflix’s streaming service has grown by leaps and bounds over the past two years, and we now currently offer thousands of movies and TV shows that you can stream instantly to almost every device in your household.  From the iPhone to the big screen TV, Netflix built in to hundreds of devices that make using our streaming service so convenient.

As a company we continue to invest in our streaming service, and we strongly believe streaming is the way most customers prefer to consume their entertainment.  However, in order to continue to invest in expanding the number of titles and overall quality of our streaming services, we have decided to adjust our pricing model.  In most cases, the new prices will not change how much you pay on a monthly basis for Netflix.

You may have noticed that our streaming service has grown tremendously in the past few years.  In fact, on a plan-by-plan basis, the average customer now consumes [INSERT % HERE] more total titles today than three years ago.  The number of titles available, the convenience and the high quality our streaming offers are a testament to that.  As you can imagine, while the number of customers streaming content has grown considerably, those who receive DVDs by mail are holding on to them longer.  Given the choice, our customers have demonstrated to us that they prefer to stream rather than wait for a DVD.

So, in order to continue to invest in and expand on our streaming services, we are going to adjust our pricing model.  In essence, we are leaving our prices the same, but reducing the number of DVDs out at a time on your account by one.  In other words, if you had a streaming plus 3 DVDs out at a time subscription, you will be switched to a streaming plus 2 DVDs out at a time.  Your monthly rate will not change.

Of course, if you prefer to only receive DVDs by mail and not stream any content, there will be no changes to your account and you will continue to pay the same rate.  We also have streaming-only options for those who prefer that option as well.

We believe these changes reflect the value we’ve added to the Netflix streaming service over the past few years, and will allow us to continue to invest in and add further value.

We sincerely appreciate your business and I invite you to write back with any comments, feedback or questions you might have about these changes.  I look forward to hearing from you.

Sincerely,

Reed Hastings
CEO and co-founder, Netflix

* Note: The pricing changes suggested in this letter reflect the pricing changes Netflix actually made; they’re simply presented in a different light.

RELATED POSTS
• Netflix: Note Up Your Queues
• Is Netflix Getting Into the Dating Game?

In a business sense, obviously the reduced price did not significantly increase sales volume to justify keeping the rental vs. the purchase model. But I don’t think it’s correct to say customers prefer to buy vs. rent as such. The truth is, Apple’s iTunes user interface (UI) was terrible for renting TV shows, and customers and the rental model were never really given a chance.

The iTunes interface suffered from a number of functional problems. For example, when you rented content, you could only play it on the device you rented it on. But worst of all, iTunes had no bookmarking feature that kept track of which shows you’ve rented, so it was nearly impossible to keep track of where you were in any particular show. Nor did the customer, as renter, know when a new episode of a TV show became available for download. One can buy a “Season Pass” on iTunes, and get the content of that TV show pushed to you automatically. Not so with a rental.

Netflix, on the other hand, has a bookmarking feature. And whether you switch between the home TV set, your computer, your iPad or iPhone, or any other device you might have, the last show you watched is marked as such. All you have to do is tell Netflix you want to watch the “next” episode in the series of the show you’re watching and it knows what to play next. It’s easy to keep track of which shows you’re watching (via a ‘recently watched’ list) and which episode you’re on in any particular show.

Without bookmarking or season passes for rentals, Apple customers likely lost track of their place and just gave up, frustrated—or forgot about it altogether. The real problem wasn’t that customers prefer to buy vs. rent, nor was it about price; it was that the cost of using their UI was too high.

The obvious reasoning behind the move is that Conan would bring in a huge influx of new viewers to the network, and while Lopez would be on later, the carryover from the Conan boost would more than make up for it.

Unfortunately, that bet didn’t pay out.  This week TBS announced they’ve canceled Lopez’s show, due to low ratings.  And a recent article in Variety posed the question: Did Conan Undercut Lopez?  It’s an interesting analysis of the ratings and speculation as to the reasoning behind the move, and anyone interested in the matter should read it.

The dirty little secret in this story is that a large portion of Conan’s audience is watching him online or with their DVRs, i.e., when time slots are irrelevant. So while TBS is happy with the overall take-in of Conan-based revenue, it doesn’t help much with the rest of TBS’s programming.

Perhaps, if anyone is taking notes here, it should be Conan. People are showing up for him and his brand, not for any particular network.  So what if he were to cut the cord, so-to-speak, and produce his show exclusively online?  Sure, at the beginning, the overall ad revenue pie might be smaller for his show, but he’d get the full piece of it and not have to share it with a network.

Internet based video content is exploding and maturing.  And many shows produced for internet consumption are increasingly grouping themselves together under “channels” or “networks” of their own.  Look at Leo Laporte’s TWiT.tv network, Jason Calacanis’ This Week In network, Streamin’ Garage, etc.

If Conan is happy producing his show and that’s all he wants to do, then yes, he should definitely be with a network that can manage his online presence and let him do what he loves to do.  But if he wants to join the pioneers of online content production, the data clearly shows that the opportunity is his to seize—if and when he wants to seize it.

RELATED POSTS
• Jan. 2010 – Conan Takes Principled Stand
• Oct. 2009 – Eight Reasons to Quit Cable TV

Atlas Shrugged

The LA Times pieces reads like his motivations for making the picture were mainly to get good reviews by the press.  But why should that matter?  Sure, the picture isn’t great, but given its low budget and rushed production schedule, I highly doubt a cinematic masterpiece was thought possible.

Could the picture have been better, even given these constraints?  Yes.  But it’s also very easy to Monday-morning quarterback the whole endeavor, and the “I could have done it better,” attitude amongst critics and even Objectivists is easier said than done.

That’s not to say that that we the audience—movie reviewer or not—aren’t entitled to our opinions.  Even if the reviews are bad, Aglialoro should be cashing in on this fact, embrace Rand’s individualist philosophy and say: “Judge for yourself: see the movie.”

Still, to blame the Atlas’s modest success at the box office on poor reviews is a cop-out.  The fact that the movie was reviewed as widely as it was only helped gain exposure for the movie, regardless of what those reviews said. Algialoro implicitly knows this, as he cites The New York Times’ decision not to review the movie as the biggest blow by the media at large.  Further, given that the movie received almost no marketing beyond press reviews and grass-roots efforts, that Atlas posted box office results in the millions of dollars is pretty good.

And, anyway, reviews in and of themselves do not make or break a picture, and there are countless examples at the box office to demonstrate this.  Even if one believes reviews do have an impact, their biggest impact would be on the movie’s first weekend at the box office.  Yet Atlas Shrugged earned a modest taking in its opening weekend.  After that, it’s mostly up to word of mouth and marketing.

I believe Atlas Shrugged’s box office earnings is directly correlated to the quality of the movie: not terrible, but not great.

If Aglialoro didn’t want to venture on to Part 2 and 3 because he was not able to make the kind of movie he wanted to, then fine.  Or if his investment will not earn the kind of returns he wants to get with his money, that is certainly understandable.  But to blame it on reviewers is not only a red herring: it also implies a second-handed motivation to making the movie to begin with.

Making a martyr of oneself to the mainstream media certainly isn’t going to garner any sympathy with audiences—and will only hurt his chances in selling his movie to those ancillary markets he so desperately needs.

But I’ve learned a lot so far about what works, and I’m sure there’s plenty more to do. Most importantly, I’m realizing the need to create mobile-friendly versions of my shows.

I’ve set up my shows on a Wordpress Blog using Blubrry’s PowerPress plug-in, which is terrific. It’s saved me an enormous amount of development time and allowed me to focus on creating content. One of the services Blubrry provides is a measurement tool that shows how many downloads my shows have received, including what form people are downloading them.

I’ve produced twenty episodes of The Movie Film Show, and I finally have enough data to draw some conclusions. But first, the facts:

Few people listen on the Web. Only 7% listen through the Web site’s flash player tool. The rest are people downloading the shows through iTunes and on their mobile devices.  In fact, 53% of downloads come from applications like iTunes, and the remaining 40% are from mobile devices.

I was amazed at the number from mobile devices, especially considering I don’t currently have a mobile-friendly version of my shows.  It makes sense, though.  Audio podcasts are best listened to on the go, whether in the car or at the gym, and Smart Phones are a great way to grab such content while out and about.

I’ve concluded that enhancing the mobile experience is my top priority. Here are three action points I will begin to execute and want to share with my fellow audio-podcasters:

1. Create a mobile-friendly site. If the current version of your site is mobile friendly, that’s great. But if you have things like a Flash player and what not, they will not work on devices like the iPhone.
2. Create a ‘download MP3’ link for each show. Most mobile devices can download and play these files just fine. That means all listeners have to do is visit your URL and click on the latest show download link to listen. Get rid of any links or features that don’t work on a mobile device (like Flash players).
3. Make sure the file size of your MP3s doesn’t exceed mobile download limits. Some ISPs, like AT&T, limit downloads on mobile to devices to files sizes less than 20 megabytes each. Make sure your shows are under that limit. If they are longer, split them into multiple files on the mobile version of your site, if possible.

Related Article: Why I Prefer Audio Podcasts

The idea of cataloguing and tracking my favorite artists sounded good. If I could “favorite” my favorite bands and get updates every time they released a new album or track, that might be reason enough to engage in the service. Getting a notification of a new Mark Knofpler album or new score from one of my favorite movie composers would have been helpful.

But from the start, Ping did not even list the most famous of artists to follow, and not even Steve Job’s much-loved Bob Dylan was listed. The reasons for this are unclear. Why wouldn’t Apple simply set up pages for all artists listed in the iTunes store automatically? I could only find a dozen or so artists, and I didn’t want to follow any of them.

Further, I wasn’t able to find my friends on Ping—linking my friends list with Facebook or Twitter followers would have been a good start—but instead I had to add them one by one, and most of the time they weren’t on the service yet. To date, I’ve followed only three or four people and, worse yet, gotten absolutely nothing out of it.

Having to access Ping through iTunes rather than the Web was also bizarre. In sum, the service had almost no content to engage with, with no artists I wanted to follow, few friends to find, and all with limited accessibility.

But I was willing to give Apple some time to develop their social network and see what happened over time. After all, Facebook and Twitter took some time to ramp up their systems to become as ubiquitous as they are today, and I could grant them some leeway. It wouldn’t cost me anything to do this, either, so no harm done.

No harm, that is, until Apple released version 10 of their iTunes software, which added a Ping sidebar to iTunes streaming a bunch of content I didn’t care about, and seemingly no way to turn it off. Now Ping was invading my screen, getting in the way of the already clunky iTunes software. I just want to find my music and play it, and here was Ping shouting at me, “Use me! Use me! Use me!” and yet, with nothing to use.

So I deleted my Ping account, and all the noise—including the sidebar—went away. I imagine others are doing the same.

Ping is a huge misfire for Apple, and to say their attempt to enter the social networking space is amateur is putting it nicely. Instead of building value, Apple is trying to muscle their users into using their system, and that will no doubt backfire, as it has with me. Without content, there is nothing to consume, and continually shoving an empty plate in front of people will only hunger them to satisfy their appetites elsewhere.

This marks an opportunity for Amazon’s MP3 store, Microsoft and others to capitalize on Apple’s misfire. I imagine integrating Amazon music purchases with Facebook is in the works. The ideas inspired by integrating a music store with social networking are intriguing and lucrative, and door remains wide open for someone to come in and execute such an innovation with success. But for now, at least for me, Ping is dead.

I had the idea of doing a movie review style podcast when I was discussing movies with a good friend of mine and film school graduate. I noticed in our conversations that I would always use the word “movie” when discussing a motion picture, and he would always use the word “film.”

Our discussions were always interesting (to me at least), and I thought putting us behind a microphone and recording those conversations would make a good show. While driving home from the movie theater one night, I was thinking about how to format such a show. Reflecting on my conversations with my friend, I thought, why don’t I be “Mr. Movie” and he can be “Mr. Film” and we’ll call it The Mr. Movie and Mr Film Show? He’ll never say the word “movie” unless addressing me as Mr. Movie, and I’ll never say the word “film” unless addressing him as Mr. Film.

So the idea was born. I soon shortened the title to The Movie Film Show and, luckily, the domain was available, and I bought it.

My friend did not live in Los Angeles, so doing a show with him would prove difficult. I didn’t really have my Mr. Film. The idea was tabled until, a few months ago, I reconnected with a former colleague, Chris Wolski, a film school grad, movie reviewer and freelance writer that I had hired at one point during my days at Box Office Mojo.

I knew I had found a good candidate for the Mr. Film role. I pitched him the idea and he liked it. We agreed to give it a shot.

The basic idea was to just have fun reviewing movies from our distinct perspectives—two unique takes on the same thing, a movie or film. The show would sometimes cheesy, sometimes funny and sometimes serious. But most of all it would be two guys having fun and illuminating conversations about a topic they loved.

This conversational tone is what worked best in other podcasts I’d listened to, like Leo Laporte’s This Week In Tech show on the TWiT Network, and I wanted to emulate the quality and production value of such shows.

Also, the vast array of podcasts I had sampled on the topic of movies was too long, boring, and too often digressed into the personal lives of the people on the show. Listening to a 60 minute or more podcast about a two hour movie just wasn’t practical for most people. In short, there was too much chit-chat and not enough content.

For my show, we would cut to the chase, and let our personalities come out over time and, most importantly, in the process of reviewing the movies themselves. People don’t care what kind of jeans we wear, or what restaurant we visited lately, or what celebrity we ran into at the supermarket. No, this would be a straight, tell-the-audience-like-it-is kind of show, explaining what the movie is about, what is interesting about it, and whether it was good or bad. Then, we would move on to the next review or topic, enjoying it all the while with a smile on our faces and sometimes with a tongue in our cheeks.

The idea of playing the Mr. Movie and Mr. Film characters was not just a gimmick; it would help us keep focused on the content, and avoid the pitfalls and rat holes so many other shows fall into.

And so that is the philosophy by which I am producing The Movie Film Show. The show’s basic structure is this: we start out with a fun and a little cheesy Bob Barker, The Price is Right kind of theme song (and a Saturday Night Live style of announcer), dive into the reviews, maybe do a feature or DVD pick, and then end with over the top but serious, wide sweeping epic film music. It would be only as long as absolutely necessary, and as short as possible.

This is the kind of tone and progression you get from any good romantic comedy, one that delivers laughs but also leaves you with a warm fuzzy feeling in your heart, and a smile on your face. That is the kind of tone we are aiming for.

A final concept I wanted to include—and too often neglected in movies today—is the idea of the “curtain call.” Over the end music, we would play clips or outtakes from the show. This is done to highlight a point discussed on the show, to replay an interesting or insightful sound bite or just for plain goofy comedic fun (and can be easily skipped by those who aren’t interested or don’t have time to listen to it).

So that’s The Movie Film Show, and the genesis behind it. I invite you to listen and hope we achieve the goal of giving insightful reviews—regardless of whether the movies or films we review are worth seeing or not—that leave you with that warm fuzzy feeling and a smile on your face.

Enjoy the show.

The first reason is obvious: audio shows do not require your full attention. One can listen to a show while driving in the car, doing menial chores or eating lunch and allowing you to stimulate your brain while doing routine or mundane tasks.

Given its nature, video shows generally work best in shorter format. You have to be at a screen and it requires one’s full attention. That’s not to say that long-format shows cannot work. I have enjoyed Kevin Pollack’s Chat Show, Jason Calacanis’ This Week in Startups and Stupid for Movies from time-to-time, but I find it difficult to stick with them because of the screen requirement and, given their hour plus length and without an audio-only alternatives (which some of them have), they are more difficult to fit into one’s schedule of content consumption.

Also, because video requires much more production time and expense, they are consequently more limiting in terms of who has the resources to produce them. This leaves the door open for some smart entrepreneurs to bootstrap a good idea and get it off the ground with little investment in the audio realm. It also means that content producers must focus more on that what of the content instead of the how and, in the end, that generally compels podcasters to make sure they’re creating intellectually stimulating content.

This is certainly not always the case, nor does it rule out the possibility of a video show accomplishing the task of stimulating the mind. However, in general, audio shows tend to be more about ideas as such and allow for more in-depth analysis of a subject as they can be more liberal in their production length.

Such low overhead in producing audio podcasts has its negative side. While the door is open for successful shows to exist on extremely niche topics, this also means there is a lot of bad content out there one has to sift through. But generally, when you find a good one, they are extremely rewarding and enjoyable.

I do not want to say that video shows are unworthy of attention. They can be more lucrative for content producers as they command much higher advertising rates. That’s not to be discounted. The potentiality for higher profits nets bigger investment in such content, and people will make take time to watch a show if it’s good enough (see my article: Eight Reasons to Quit Cable TV as a first point of instruction for how to clear some room for any video podcasts you might be inclined to watch).

But, for the reasons discussed here, I think people tend to be more loyal to the audio shows they do consume. They’re easier to fit into one’s busy schedule and audiences therefore have more time to get to know a show’s personality and style. As a result—and content permitting—there is higher potential to become more invested in these types of shows.

What about the customer in all of this? Let’s re-write the article’s headline from his point of view: “$1 DVD Rentals Could Save Customers $1 Billion.”

As a customer, this sounds like a good idea to me—and I can put that extra $1 billion (or however much of it is my portion) into other areas of my life that are more productive for me.

The report reeks of union protectionism and overpaid workers whining about a pay cut, as well as brick and mortar rental stores who can’t compete with cheaper and more convenient alternatives, such as Netflix and Redbox. It evades the fact that producers set the price at which they’re willing to sell their products. They sell their products to the likes of Netflix and Redbox, and they set the price for doing so. If they feel they’re not being paid enough, they are free to raise prices (and customers are free to not buy it as well). All this amounts to is a complaint that the market is not paying them enough to make movies that audiences aren’t willing to see (i.e., pay enough to see).

If it’s not profitable to make movies for some producers, fine. Those people may have to find other ways to make a living and be productive. Even if it means less movies are made, as the report argues, so what?

Let’s face it: when it comes to entertainment, quantity is the not the problem. Netflix and others throw buckets of money at research and development, trying connect you to movies that you actually want to see.

If jobs are lost as result of less revenue, those left standing and making movies will be the ones who can make a profit doing it, and ultimately that means those skilled at producing content that audiences want to consume will prevail. It means better movies for you and me, and less crap to filter through.

This report is really a sign of progress, increased efficiency and productivity based on innovation and technological progress, not a negative. So enjoy your $1 DVD rentals and Netflix subscriptions, and enjoy them guilt free.

Adding an option where you can attach a note to each item in your queue would remind you why you put it there in the first place. When you get that e-mail telling you such-and-such a movie has just been mailed, it will include your note. You could write anything you want in there, such as:

“Don said this was good, call him after and discuss fight sequence.”

—Following up with friends is always a value.

“Movie torturous, hilarious with Rifftrax.”
—Don’t forget about it later when it finally arrives.

“Wife wanted this one.”

—Time to schedule a night in and prepare the snacks.

“Jessica Biel. 1 hour, 3 minutes, 15 seconds.”
—Are you beginning to see the value here?

Hopefully Netflix will add Facebook and Twitter integration soon, too. The notes feature would work well here. I might tweet: “Just added ‘Talk of the Town’ to my #Netflix queue as part of my legal-themed movies marathon.” Please, Netflix, allow us to attach little notes to the movies in our queues. It will make using your service that much more valuable, useful and rewarding.