Netflix's public apology, and ensuring announcement that the DVD service would be split off into its own service, called Quickster, have been met with a public reaction the company should be getting used to: disappointment, frustration, and scorn. But in the following days, the company has signed up two big content partners--Discovery and Dreamworks Animation--to help keep their streaming video service attractive to customers.
Netflix Not Dead Yet
Netflix hasn't had a good summer. First they had the price hike announcement, and the outrage from consumers that followed. Then they annoyed a few more customers by enforcing an old rule disallowing multiple streams at the same time on one account.
Even their attempt to apologize for these missteps was panned by consumers, who found it to be too little too late, particularly when coupled with the bizarre decision to rebrand and spin off their DVD service.
And yet, despite all these screw ups and mistakes, Netflix is far from dead. Sure, they've lost a lot of subscribers, and many more are still considering leaving. But compared to their competitors, they still have huge subscriber counts.
And Blockbuster/Dish fumbled their chance to capitalize on Netflix's errors by launching a similar service with glaring flaws of its own--namely, that you have to be a Dish Network customer to use the new Blockbuster service, along with the fact that the service's streaming portion is severely lacking in content offerings.
For Netflix, Content Is Still King
So it's a pretty big deal that, in just the last few days, Netflix has managed to sign major content license deals with the Discovery network of channels and Dreamworks Animation studio. The Discovery deal will bring content from cable channels like Discovery, TLC, and Animal Planet. The Dreamworks deal, which will bring the studio's animated films to Netflix starting in 2013, will include new releases and existing hits like Kung Fu Panda.
The Dreamworks deal is noteworthy because it's the first major Hollywood studio that will see new releases given to Netflix instead of the traditional pay per view television model.
As I have been saying all along, even bad PR like what Netflix has accrued this summer can be overcome if the content is attractive enough. If Netfli bests all the competition in signing up the best top movie studios and television production companies, a great number of customers will come back--or be talked into staying in the first place.
If anyone wants to carve out a piece of Netflix's market share, now is the time. But you'll have to have a service that beats Netflix on price and content selection, and so far... that seems to be a tough combination for anyone to achieve.