Netflix and Apple: A Tale Of Two DVDs

Written on September 20, 2011 by in Technology

Things are happening fast. Faster than any of us ever imagined. The rate at which technology is improving has hit a stride that does not appear to be slowing anytime soon.

With this comes innovations, conveniences and opportunities few of us could ever imagine. But along with it will comes churn and the death of aging or inefficient technologies. Take one look at recent decisions by Netflix and Apple and it isn’t hard to tell that the DVD is getting ready to go the way of the CD, the VHS, the floppy disk, the cassette and the 8-Track.

What is surprising (or disappointing in the case of Netflix) is how these two companies are approaching the future.

Take Netflix: the sheer velocity of the shift from DVD to streaming took even them by surprise. Now I’m not going to rehash their utter failing in properly communicating the change (Gini did a WAY better job than I could have anyway), because I do see how it was necessary.

Now compare that to Apple. It is plain to see that they feel that optical drives1 are dying. In fact they are going out of their way to kill them with their focus on the MacBook Air, the rumored DVD-free 15″ MacBook Pro and the death of the standard MacBook.

The difference between these two companies is that Apple is willing to leave money on the table now in lieu of the future. They aren’t only seeing the future, they are creating it. At the moment, if you were thinking about buying a computer, a DVD-Rom is probably a key feature in your mind. It is something we’ve come to expect from a computer. At the moment, Apple is willing to let those customers walk away in order to ensure the best possible future for their products.

Sure, some will say that this is self-serving of Apple. That one less DVD is one more iTunes download. And they are right, it is. But here is the thing, Apple isn’t only seeing an opportunity, they are ensuring it comes to fruition. Clearly Netflix sees the same thing. Clearly their data is telling them that streaming is their future. So why not burn the ships and forego DVDs? Fear and greed, plain and simple.

Unlike Apple, Netflix simply told us their new business models rather than taking the time to show us the future. They also told the movie studios that DVDs still matter (even if they matter less), which will only make it harder to get better streaming content. Like the music industry before it, the movie studios still think they have time and Netflix just confirmed it.

While Qwikster is clearly a first step towards the death of the DVD, it wasn’t enough2. When you are truly committed to the future, that often means leaving the past behind. This is the reason we will continue to see companies like Apple thrive and why many are questioning if Netflix will continue to stick around.

  1. DVD/CD drives. [↩]
  2. And Gruber is right, how the hell did they not name this initiative Mailflix [↩]
10 Comments - Leave a comment!
  • http://twitter.com/sydcon_mktg Jennifer Devitt

    One more iTunes download is right! This makes room for AppleTV to grow! We just got it recently, kids love it! It allows you to stream shows or movies from Apple TV to your TV, iPhone, iPod, iPad without storing them on the device!  You can rent or purchase…no more DVD’s in my house!!!!!

    • http://michaelschechter.me MSchechter

      Haven’t gone for Apple TV just yet, kids are too young and havent found the right reason to crap rationalize the purchase. That said, we just had our second and I had to give up the DVD collection. It was sucking up space and not getting used enough. Anything we watch is iTunes these days. Hell, more often than not we watch on the iPad :)

      • http://twitter.com/sydcon_mktg Jennifer Devitt

        I would give AppleTV another look.  We stalled for awhile (my brother-in-law) was a early adopter. We have all of our photos linked to it as well as our home movies.  For the one time $100 investment its worth reconsidering since you are already watching stuff via iTunes.  My youngest has been sucked back into the Lion King thanks to AppleTV (she just turned 7).

        • http://michaelschechter.me MSchechter

          Can’t quite get my 3 year old to get into movies… more of a book and TV kind of girl. Probably a good thing, but would love to be able to watch Toy Story 100 times or so with her. Might have to give it another look…

  • http://twitter.com/cloudspark cloudspark

    “Unlike Apple, Netflix simply told us their new business models rather than taking the time to show us the future.” – Well said and most companies would be willing to take note of that distinction. While companies continue to talk features and models, they’d be better served (and excited the consumer more) by speaking to benefits, use, and they way they’re meeting our needs now and in the future.

    Thanks for a great post. Jenny Schmitt (@cloudspark)

    • http://michaelschechter.me MSchechter

      It’s a hell of a lot harder to aim higher. Thankfully there are a few companies like Apple paving the way.

  • http://www.craigmcbreen.com/ Craig McBreen

    Michael,

    Thanks for this!

    I have an iMac with an optical drive, but I can’t remember the last time I used the darn thing. Everything is in the cloud, isn’t it?. Ones and zeros passing through us every second of the day :) :) Well, kind of.

    Like, Jennifer, I am very interested in Apple TV and the convenience that brings. I would also like to quit Comcast. I certainly won’t miss DVDs and trips to Blockbuster. I like, love the sound of an iTunes library of movies too.

    I just hope Apple continues to innovate with Mr. Jobs gone. I can’t think of any other company that does what Apple does so well, on so many levels.

    • http://michaelschechter.me MSchechter

      Yep, the bit flipped on the optical drive (bump, set, spike on the binary references!).

      I’m interested in Apple TV, but it isn’t quite cooked yet. Soon (I hope), but not yet. 

      As for the post Job’s Apple, I’m a believer. Went on a rant about it a bit ago: http://michaelschechter.me/a-dent-in-the-universe-is-permanent/

  • http://freetraffictip.com Tinu

    Not only did Apple embrace the future, it prepped us by giving us an alternative to what we have now. I last used my DVD drive 6 months ago, and that was to install a program to my computer. Often instead of renting a DVD, I rent a download from Amazon Video or iTunes. 

    I’m not going to re-hash either, in my now overdue post. But I will definitely be referencing this, saving me, and my poor readers, at least 250 unnecessary words.

    • http://michaelschechter.me MSchechter

      And now it is the same with apps. At first, I wasn’t thrilled that developers were going to lose 30% (read: inevitably we will be paying 30% more), but the experience is more convenient. When my MBA (I really think they named it MacBook Air so schmucks like me can say they have an MBA) needed to go in, I hardly lost an hour as most of my key apps are in the App store ready for instant download. Happy to save you the time!