How to Lose a Customer in 28 Days...

With the ever shrinking consumer dollar continuing to cause the demise of countless businesses, it is almost comical to see organizations still doing everything they can to eliminate the possibility of ever reclaiming those lost dollars.

Case in point is the recent report that "Netflix" and "Warner Brothers" outlined in this article, confirms that Netflix will not make new "Warner Brothers" releases available until 28 days after their initial release, thus making their customers wait longer for a movie they evidently might want to see. This agreement was surely made with the idea that it would generate new DVD sales for these particular releases as a result of their limited availability. What "Netflix" and "Warner Brothers" seem to neglect several points in coming up with this seemingly hasteful decision.

1. The consumers who haven't gone to the movie theaters to see "said" title have already waited between 2 - 6 months for the release of this movie to DVD. What is another 28 days in the grand scheme of things??

2. With the ever growing popularity of Coinstar Inc.'s RedBox, what would deter customers from utilizing this service that does not have the aforementioned hand-cuffing as it pertains to the DVD release date?? This would also allow customers to enjoy another service and possibly cancelling/downgrading their membership with Netflix.

3. What customer in this current economic climate would "roll the dice" and buy a $20 movie that they most likely haven't seen. That seems like a bit of a steep risk.

4. It instills in customers minds that "Warner Brothers" must not be confident in the idea that once you rent the movie via Netflix, you will want to own that movie.

Renting a movie via "Netflix," "Blockbuster," "Red Box," or any other medium works the same way as hearing a particular song or artist on the radio and liking the song so much you want to buy it. Same applies to movies. I can't count on my hands how many people I have talked to who have rented a movie via Netflix and then bought that movie shortly after because it was "that good." As a consumer who have purchased over 500 movies as well as posters, and other various memorabilia from movies, I feel it is a lack of confidence shown by "Warner Brothers" in their movies which caused a reason for this agreement.

I also feel "Netflix" is basically telling customers that you pay for a service but we will hand-select what you can or can't utilize regarding your service. I have been a "Netflix" customer since its inception and have used it to view many movies/shows/documentaries ranging from new releases, to classics, and catalog titles but am basically appalled at the idea that they will not allow me to utilize the service I pay for. I have many friends/colleagues who are turning to Coinstar Inc.'s Red Box to get their new releases and given the agreement reached, I will be forced to do the same thing. This will obviously result in me lessening my subscription to "Netflix" and reallocating my funds originally set aside for Netflix and giving them to Red Box.

Enough of the negative thoughts as a result of this agreement, I would be willing to offer some advice from a customer and outsider to the deal as how this would have been beneficial to all involved.

1. I have always thought that "Netflix" did not advertise the new release movies as well as they could have and I am not only talking about renting. If members had the ability to purchase movies on their Netflix account and have them charged to the Credit card linked to that particular account. I am also not talking about "pre-owned" movies but brand new movies offered to Netflix customers at a "special price" and have this price offered only during the first 28 days following the release of the movie. This way you will generate new DVD sales to "Warner Brothers" (which obviously seems to be the big issue here) but also offer a means of customer appreciation to Netflix members.

a. Additionally this would increase the need for "new release" movies as in the aforementioned article Netflix states is one of their lower demanded items. The need for "new release" movies would in turn generate a need for Netflix to buy additional copies of these movies from "Warner Brothers" and while sold to Netflix at a discount, would still movie volume which assists the bottom line, not to mention the amount in royalties that Netflix pays to the movie studios on their releases when rented.

b. But the benefits do not end there..... After about 6-8 months when the "novelty" of that new release diminishes, and Netflix as a result has an abundance of these copies available, can start to offer them at a heavily discounted pre-owned price. This would clear inventory and still turn a profit on the backend sale of the DVD.

Just one idea and I am obviously not in the industry but it could work?? What are your thoughts?