Are you an Adopter?

Qwikster is well positioned to help jump-start streaming media adoption by Netflix subscribers. Qwikster isn’t as appealing as the Netflix brand. It’s new, unknown, it’s a risk. Netflix is a trusted brand, a brand with a lot of appeal.

The end game is for Netflix to dump the DVD rental service because it’s a hell of a lot more expensive to maintain than streaming. The logistics of moving physical discs can be a gamble. It’s costly in part because of the inventory that must be maintained. Distributed across the whole network of subscribers, DVDs strategically placed according to anticipated subscriber viewing habits. We’re talking about a huge inventory and a lot of chance to mistake.

Steaming costs are mostly determined by the price of the licensing. Each title is separately licensed or as part of a library, licensed for viewing on the streaming network. Starz provides a huge library, and Starz is leaving Netflix. After Starz has left they can renegotiate the terms of their licensing. Placing their price higher because the demand is there. Obviously people want streaming.

Why keep up with DVDs when you can watch the same movie on your phone, your computer, your XBox…? It’s a lot more convenient to watch the movie wherever you are. No worries about scratching the DVD, or losing it. You pay for the licensing. Not the physical disc.

So Qwikster is setup for the fallguy. It’ll be the company that captures the late adopters (and the no-adopters). There will always be a place for the physical rentals. Some people need to touch that DVD. Some don’t have internet. Some just won’t frackin change.

Now enter the tiered bandwidth pricing proposed by Time Warner, Comcast, AT&T… You pay based on how much you download. Now think about watching all those great movies on Netflix. Each movie paid for with two subscriptions: one to your internet service provider, the other to Netflix. That’s the hidden cost of this new system of streaming media.

Am I happy about Qwikster? NO! I don’t like change either and yeah, I’ll probably subscribe to both of the blood sucking ass monkey service providers: both Netflix and Qwikster. I’ll even pay for my high speed internet too… I’m an adopter.