≡ Menu

Why Netflix is a cautionary tale for newspapers

The problem for print publishers — one that Netflix arguably doesn’t share — is that their legacy business still produces the bulk of the revenue they pull in via advertising, and therefore, the incentive to de-emphasize or radically downsize that part of the business isn’t as obvious. Hence, the reason why you see so many publishers opting for paywalls, which bring in incremental revenue but are mostly intended to function like a line of sandbags, keeping existing print subscribers from deserting that business for the free web.

Netflix doesn’t have to worry about the impact of its shift on advertising revenue the way that newspapers do, which is probably why it has accelerated its move, while many print publishers are still waffling about what to do more than a decade after the rise of the consumer web. All Netflix has to worry about is the impact on its customers, which is why Hastings has become so apologetic. The effect of the changes on the company’s revenue — and the resulting decline in the company’s share price — are enough to make it obvious that people don’t like the change.

Poor, poor Netflix. This is starting to feel like the early stages of a (very) bad breakup.

We already loved you—how could we not? You have spent years enticing us—the eager and easy-to-please consumers—with simple DVD rentals and multiple-device streaming services, along with an ever-growing library of movies, documentaries, and television shows—both new and old.

Stop trying so hard to make us hate you!

Comments on this entry are closed.