Monday, July 18, 2011 at 12:51 pm.
The Netflix price hike is designed to kill the DVD the same way Apple’s iMac killed the floppy
As you know there are a lot of us still watching DVDs and specifically those first-run titles on our relatively big-screen TV but that’s a lagging indicator. That’s like the person who so vociferously and so vocally objected to the introduction of that first iMac that came without a 3.5 inch floppy drive. ‘What am I supposed to do,’ that person asked? ‘My whole life is on 3.5 floppy. I finally migrated off the 5-inch drive and now your marketing a computer that has no 3.5inch drive.’ It was outrageous, until it wasn’t. Remarkably what people found in a very short period of time was directionally it was where we were already going and Steve Jobs just recognized that a few minutes before the rest of recognized that. I would say that in this case, that’s the comparison.
By pushing everyone toward the streaming-only plan — and away from DVDs — Netflix can make the case to Hollywood studios that they need to license more of their content for streaming. It makes sense; now we’ll see if it can happen quickly enough for Netflix to keep its footing.