The Netflix Dilemma

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I use Netflix all the time, mostly to re-watch shows I can't seem to get enough of and discover new favorites. (Parks and Recreation, anyone?) Which is why it's really kind of sad that, from a business perspective, my beloved Netflix can't seem to get their act together.

Netflix announced its earnings yesterday, and the numbers were a little grim. Netflix stock was down a whopping 14% today. Future customer growth projections don't look so great either.

This leaves me wondering what's coming next for the once-super-innovative movie delivery company. They made a big step forward a couple of months ago (in my opinion at least) when they announced that they would be bringing back Netflix-exclusive new episodes of Arrested Development, a now cult favorite that struggled to gain ratings when it was on the air. If there was ever a reason to keep Netflix, this was a huge one for me.

What's yet to be seen is if Netflix will start hosting more of its own content, akin to what a television channel does, or if it will try to become a more robust service, like cable. These days, it's caught somewhere in the middle. And that's a problem.

It's no secret that, last summer, Netflix botched its marketing of online streaming, breaking it out into a separate service many customers felt should be combined with their previous direct mailing service—DVDs, straight to your door.

I should clarify that I'm a relatively new adopter of the technology, which may explain why I have a mostly positive experience with the company. I signed on with Netflix in November, and have enjoyed their streaming service immensely. My only complaint thus far is that I'm a huge Woody Allen fan, and all of his movies, last I checked, were by-mail only. I simply refuse to pay extra for the service. Why can't they be streamed, too?

I remember thinking that this cartoon from the Oatmeal put Netflix's unorthodox business approach (Qwikster, which they abandoned in October) rather perfectly. And any marketer will tell you that consistently misreading customer desires can spell doom for a company.  Some other bloggers on our site have been very critical, too.

Best of luck, Netflix. I hope, come this time next year, I won't have to search for my (almost) daily Arrested Development fix elsewhere.

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