I tend to agree with Henry Blodget that no matter how painful Netflix’s woes have been this fall, and even if they’re not over yet, the company has a basically solid business model and that the hysteria over the company’s future seems at least a tad overblown. But I am curious as to what’s happened to one of the things that seemed smart about the quickly-ended Qwikster plan: the plan to offer video game rentals. Hastings has said it’s up in the air
If they’d been able to pull it off, it would have been smart and gone some way towards persuading customers not to give up the service or switch to competitors like Blockbuster, which does offer video game rentals. iTunes has become increasingly essential because it’s a one-stop shop. And if you could get most, if not all, of what you want in a bunch of categories, it becomes harder to leave a service that does that for multiple services that give you the equivalent amount of what you want or marginally more for the headache of managing multiple logins, bills, queues, etc. It might bring in new customers for products, too. Given my general level of incompetence at video games, I think I’d be more likely to try certain titles I knew I might be not be able to play all the way through just to get a taste of what they were like, but that I’m deterred from because of their cost.
So what’s the holdup? I imagine negotiating content deals with an industry where consumers are still willing to pay full-price for games is harder than it is with an industry where people are cutting cords, pirating movies, or gravitating towards free, ad-supported options like Hulu. But I assume that it’s still possible. And that even if it required charging users an add-on fee, people would still subscribe. So is Hastings just hedging his bets after a series of disastrously certain pronouncements? Or is he walking away from what could be a smart addition to the business? The former would make a certain amount of sense. The latter would have me worried about the company’s capacity to innovate.