Tyler is a writer for USCharterService.com
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Top Reasons Netflix will Fail
The Netflix subscription-based digital distribution service was innovative back in 1999 when they first got their start. In today’s world, Netflix may be a dinosaur with one foot in the proverbial door. Between rising prices and customer complaints, this DVD-mail and media streaming company might be looking at the end of the end despite partnerships with heavy hitters like Nintendo and Apple. Here are a few reasons why Netflix may be headed for trouble.Price Increase
Netflix took a big hit to their subscriber list when they decided to segregate the pricing system for streaming and DVD rental programs. In other words, choose; do you want to stream or get DVDs in the mail. If you want both, you have to pay for both. The company claims they have recovered from the initial drop. They are regaining some of the trust from their loyal subscribers plus adding new customers all the time. It is yet to be seen whether they really came back as strong as they are claiming, and if it will be enough to save them. Asking your customers to pay twice as much for the same service is not conducive to staying afloat in the business world. In fact, it may be a deal breaker for many people.
Legal Issues
It is hard to forget that little issue Netflix had with their algorithm contest. They wanted their system to have the best features possible, and to achieve that goal, the company started a contest to create the perfect algorithm. Companies were encouraged to develop a formula that could predict user preferences and movie recommendations. The payout was big and the competition stiff. The problem is by giving these contestants access to their customer database; apparently, Netflix may have accidentally given away your account information. This oops led to a class action lawsuit, just one in a number of legal problems plaguing Netflix in the last few years.
More recently, the company is facing a class action suit filed by the National Association of the Deaf. The complaint is based on a lack of closed caption options for streaming videos. The suit states that deaf people sign up for the service expecting captioning but are unable to watch a large bulk of the movies. It doesn’t take many multi-million dollar class action lawsuits to kill a company.
Throttling
Netflix has a throttling policy. This means it gives priority to those subscribers who rent less each month. If you are one of the customers who uses your unlimited service, you may end up waiting longer. If shipping DVDs costs more each month than the subscription fee, there may be a problem with their business model. One way around this issue is to throttle the shipments. If you are making a nuisance of yourself, then Netflix may accidentally divert your shipment or have an unavoidable delay.
Streaming
One way to get around throttling is to stream your videos; this means no delay. The problem is the streaming quality from Netflix is inconsistent. How well your system streams depends on many factors. Streaming is reliant on bit rate, for instance. It may be that your connection cannot handle this method without having annoying buffering to deal with constantly. Isn't that why you went for the mail option? Oh wait, you got throttled for renting too many, which is why you are streaming.
Only Playing with the Big Boys
Netflix relies on both Microsoft and Apple, so it is understandable that they don’t want to support the Linux operating system. The problem is the world is moving beyond the big boys, especially when it comes to operating systems and Internet browsers. The increase in availability of development software has led to some interesting applications that are not Windows or iOS. If Netflix refuses to grow with its subscribers, it may not have any in time. Computer technology is a river that is constantly changing. They need to accommodate those customers who think outside of the conventional box.
Netflix is a good news/bad news service. The idea is still innovative enough that eventually someone else is going to do it better than Netflix. With the problems they are having, right now that wouldn’t take much. Ultimately, a competitor that does not throttle or limit its customers will probably be more effective. In the mean time, if they want to stay in business, Netflix needs to start acting like the customers matter. Building up a solid, reliable subscriber base is what has the potential to save this company. That isn’t going to happen unless they work out some of the kinks in their interface and mailing program. Getting more current movies might help too. The selection on Netflix tends to be stale at times.
