When anyone speaks to the press, it’s a good idea for that person, or any spokesman for an organization or another person, to actually think about what they’re saying. I understand that there may be some pressure to say something ‘right now’ rather than think about it, which means you’d better think about the questions before you get the call. I came across a stunning example of this last week in Sides Form Over Threat to Saturday Mail Service by Yeganeh June Torbati (New York Times, 5 July 2010).
There is some weakness in the article in that, as far as we can divine from the text, the “sides” aren’t balanced. Against the change are postal employees wanting to preserve current work schedules, credit card issuers and insurance companies not wanting to miss a single opportunity to send you a bill, and health care networks hoping to reduce costs by mailing prescriptions. On the other side, nameless businesses that have kept some national organizations from coming down solidly against the change with no reasons given and Netflix preferring the cut to even the smallest of rate increases. Come on, shouldn’t the writer have done a little more to flesh this out? And aren’t we all pretty used to the occasional rate increases for what is, in daily use, an excellent service?
The article quotes Andy Rendich of Netflix (Chief Service and DVD Fulfillment Officer) in support: “Big rate increases will absolutely squash business and will absolutely slow growth for a company like Netflix.” The article did make fairly clear the interests of those opposed to the cut, but let Netflix completely off the hook. A journalist has some obligation to make the issues clear: Had I been writing this piece, I would have called bullshit. (In a most dignified and regal way, of course.) Netflix’s motivation is the same as a landlord campaigning for a switch to thirteen months from twelve in the year. Their costs are absolutely tied to the number of days their shipping facilities are open, their income is absolutely tied to the passage of months. On average, this cut will reduce every operating expense the company incurs by at least 15%: wages, DVD purchases, and postage. It won’t have any affect on executive salaries or rent, but everything else is driven by the number of mail days. Are they ready to lower their subscription rates by 15%? I doubt it.
There has been a case of landlord’s benefiting from a reduction in the length of a month, but it was a one-time gain in every country when it switched from the Julian to the Gregorian calendar. Netflix would make out like bandits every month. Until their subscribers woke up and noticed they were getting screwed.
In terms of public relations, perhaps Netflix should be all in favor of this change, being careful never to let a soul know about it. In actuality, Netflix is a major part of keeping the postal service afloat, along with eBay, as most correspondence moves to e-mail. The six-days-per-week delivery of DVDs is their primary competitive advantage over their competition. If they think that moving from physical delivery of DVDs to streaming the same content over the internet is to their advantage, I wish they’d share what they’re smoking. Their only advantage in the online-delivery arena is their pool of dedicated subscribers. Crap on those subscribers, which their support of dropping Saturday delivery does, and their days are numbered.
The Times should have done a better job of laying this out, Netflix should have been more intelligent about revealing their motivations, and Netflix really needs to think about where their interest lies. The Empress Larkin and I are satisfied Netflix patrons (standard two DVD plan), but we’re not likely to ignore changes that run counter to the royal viewing needs.