The Faithful Servant Wakes Up

Two days ago I was driving to the store for milk and lettuce to support my (fairly mundane) eating habits.  I turned left on Slauson and into the on-ramp for the 90 to Marina Del Rey.  Suddenly I woke up.  This is not the way to the store; this is the way to the job that I felt happy and secure in, three days ago.

Yes, I have been “laid off.”  This is a first for me and I was unprepared for the emotions that it brought up.  I needed a little refresher on the Five Stages of Grief to make sense of it.  Hopefully I won’t be getting to Stage Four.  I’ve never been prone to depression and don’t expect it now; but I didn’t expect the others either.

The experience itself?  I came into work on Monday to find the parking lot less full than usual.  I got my coffee as always and went to my desk.  It was eerily quiet everywhere in the office.  I answered three emails from London, knowing that they would be leaving the office soon.  I checked for new projects in my queue.  I went for another cup of coffee and noticed that my section was empty.  Ominous.  My Manager saw me, seemed flustered, and said “do you have a minute?”

Skeletons_Funeral_David_GoodrichDown the hall and into an office, seated across from the head of HR.  She got straight to the point and continued on, but after the first few sentences I was sealed in a cocoon of numb shock.  Vacation pay, severance, COBRA and finally reaching behind her desk while asking if I needed a box for my things.

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It’s Easy to Kick Netflix

I own Netflix!  Well, at least a handful of shares.  I’ve bought more over the last few weeks.

Netflix vs. S&P 500
Netflix in blue 🙁

It’s been easy for commentators to kick Netflix this last month.  Necessary but unpopular changes went into effect with (to the average user) little warning.  Unnecessary changes (Qwikster) were announced and dropped.  This is the usual bag of comments:

Do We Really Need Netflix?

I dropped Directv a year ago.  I was paying $80 a month to watch John Stewart and a Rugby Match every week.  I found that, given the choice between TV and Netflix, Netflix won nine nights out of ten.

What the commentators are missing is the difference between entertainment and “instantaneous” entertainment.  Instantaneous as in sports, news, this season’s hit TV show and the latest “blockbuster” movies (delayed for months).  This is the same, not so fresh, instantaneousness that film producers are trying to eke a few more dollars out of as movie theaters fall out of favor.

Netflix eschewed this content from the start and left that ground to competitors to scrap over.  Coming from the DVD distribution business, they knew in advance that their customers didn’t much care for fresh so much as for quality.

So when commentators speak about Netflix not having a “moat” for the streaming business, they’re really talking about that tiny slice of current content that Hulu and Amazon are fighting for.  Netflix’s moat (which I hope they now understand) is the sheer depth of their content when the DVD and streaming are combined.

In the last month I’ve watched obscure anime (Darker than Black, Clannad) and two series (Criminal Minds, Eureka).  Next week I’ll have a Jean Cocteau film festival every night.  That’s leaving out the documentaries.  Sure, maybe I’ll be lured by Hulu or Vudu or whatever.  Maybe I’ll check out what they have to offer.  Will it match up to the kind of expectations that Netflix has instilled in me?  Not a chance.

So, I still own Netflix.  I’ll probably buy more.

PS:  I wrote this before this evenings earnings announcement.  The stock is down to $86 after hours.  I’m putting in my order now.  All of you Benjamin Graham fans will understand.

Movie Studio Fail

It’s now been three months since I dropped DirecTV.  I started with them to watch some Rugby.  I had to sign up for a premiun package in order to add the $12 Setanta Sports channel.  It all came to $80 or so.  My wife and I didn’t get into much else;  Rachel Maddow on MSNBC, The Soup on E!.

There were a few shows that we wanted to watch, but they were all on HBO and Showtime.  Not wanting to jack up our costs over $100/month, we started with Deadwood from NetFlix, then Madmen and Lost.  When we realized that we were watching 90% NetFlix in an average month we came to an easy decision:  “What the hell are we paying DirecTV for?”

What we didn’t care about was immediacy.  We didn’t care if we watched the final season of Lost now or later this year.  We’ll see it sooner or later, and that’s good enough for us.  We’re now streaming NetFlix and getting 20 local channels with a cheap digital antenna.  Total cost is $20/month and with the savings we bought a huge (by our standards) TV.

Immediacy is apparently the only thing the Movie Studios have left.  Bloomberg Reports that Studios are considering a “Premium” showing of their latest movies for up to $30.  That’s not $30 for movies now in theatres, that’s $30 for movies that will be released on DVD and BluRay in a month or so.  $30 for the privilege of seeing a movie in transition from theatres to disc.

I’ll grant that the industry is in trouble.  Nobody’s going to theatres and nobody’s buying DVDs or BluRays.  This kind of thinking will only make it worse.  A whole new group of consumers will wake up one day and realize that they can live without the immediate experience.  NewTeeVee has a few thoughts in that direction:

“…the at-home audience already has a wealth of choices at its disposal without having to resort to what amounts to a $30 rental of a film, even in a “recently released” film window. While theoretically the cost of a $30 VOD purchase is lower than the cost of a family of four going to the movies together — especially when one considers the cost of concessions, etc. — that $30 VOD rental will be compared to a $5 VOD rental through the same service. As a result, the amount of potential consumer demand is bound to be limited.”

So…right now I’m feeling good about my choice.  I’m seeing everything I want to see and, because I don’t need to see it right now, I’m paying a reasonable price.  Estimates are the 800,000 folks left the Cables and Satellites last year and didn’t move to something else.  Seems like the beginning of a movement.