I was honored to have been selected as a Commissioner and that Sorenson Media was the sole video workflow solutions company chosen to be part of this Commission that worked closely with President Obama's CTO & CIO. And, I am absolutely committed to have Sorenson Media continue to lead the way in terms of innovating cloud-based video workflow solutions. To learn more about Sorenson Media's industry first enterprise-grade cloud-based solutions, click on this link.
Tuesday, July 26, 2011
I am pleased to report that TechAmerica's Cloud Commission, on which I am proud to have served, just now this morning released its long-anticipated recommendations to the Obama Administration. Here is the press release from the Commission itself -- click here. And, here is Sorenson Media's own press release -- click here to read.
Netflix just recently changed its pricing structure of course -- essentially, higher overall pricing has been implemented for its combined online streaming and physical DVD business. And, the negative Netflix customer blowback has been substantial. In the minds of many, Netflix committed an act of treason by changing its pricing structure. The ultimate betrayal -- "how could you do this to us Netflix?"
Ridiculous! (And I am a long-time Netflix customer who will be impacted by this new world order). Instead of being bashed for its price changes, Netflix should be praised! Huh, what? What did you say? YES, that's right, Netflix should be praised.
Netflix has revolutionized the game in terms of online delivery of premium television and movie content. On that, we all agree. But, even more, Netflix has also revolutionized the game of developing new online business models -- new pricing structures -- new ways to monetize content in the brave new world of electronic delivery. The physical DVD business is going away -- and Netflix is experimenting with new pricing models to address the economic realities with which it is faced. Fine-tuning, if you will.
You see, cost structures are very different in the online premium content distribution game. Without getting into specifics of why the world is the way it is, Netflix only had to pay the studios once when it shipped its physical DVDs (i.e., it only had to pay for the actual physical copy of each DVD it shipped -- and then re-shipped -- to its customers). In the online delivery world, however, Netflix must pay the studios EVERYtime it delivers a new stream to a customer. And, the studios are charging Netflix an ever-increasing sum for the right to do this. (By the way, don't blame the studios either for doing this -- they too are trying to find a biz model that works for them in this brave new world which has disrupted the old one).
So, Netflix is simply trying to find a pricing structure that "works" -- a balancing act between pleasing its customers and increasing subscriptions on the one hand, and paying for its bills and making some money on the other hand. And, this kind of continuous pricing iteration will go on and on over time because we are still in the very early innings of online distribution of premium content. And, let's be clear -- other service providers will benefit from the learnings of Netflix!
So don't blame Netflix for "trying to figure it all out." Praise Netflix for being a market leader that has found a way to be profitable to date -- and is fine-tuning its biz model to be profitable in the future. The company simply wants to be a winner. Is that so wrong?
And, if you, as an existing customer or prospective customer don't like that, then vote with your dollars and go to another service provider.
Although that unlike Netflix, that other service provider may not be around in the future ...