Why People Hated Netflix When Streaming Launched
In the same way that it's hard to imagine Dwayne Johnson as a tiny, baby-faced infant, it's difficult to imagine a time when Netflixwasn't a culture-dominating behemoth. Yet it was just 10 years ago that the company, then famous for its red-envelope DVD delivery service, first introduced its streaming counterpart, "Watch Now," which launched with just 1,000 titles of debatable desirability and only worked on PCs and Internet Explorer. Netflix CEO Reed Hastings was cagily modest about its launch state, even though he knew it would eventually dominate home viewing: He named the company Netflix when it launched in 1997 because he was confident that the internet was the real future, not the mail.
Tech changes at lightning speed: What looked cutting edge a decade ago can seem laughably clunky today. For example, consider that in 2007, people were still crowding MySpace, which, in retrospect, just seems like a janky mess. So how has Netflix changed in 10 years? And more importantly, how has our perception changed? We dug up early reviews of Watch Now (way back in the days before anyone even considered pairing streaming video and chilling) and compared the many aspects of the service and its influence then to what it's become.
1. The price
THEN: When Watch Now first launched, you received monthly time credits commensurate with how much you were paying for Netflix's mail service: One hour for every dollar. So if you had the $9.99 plan (with one DVD check-out at a time), you also could stream 10 hours' worth of free programming. Your $17.99 monthly membership (three DVDs) got you 18 hours.
NOW: It's downright quaint to remember a time when someone could walk away from their computer satisfied after streaming just 18 hours a month. Today you get unlimited streaming for monthly dues that can range from $7.99 to $11.99 (depending on your need for HD and number of devices you want to simultaneously use). And by last July, the average subscriber was watching 1.9 hours of Netflix a day: That's 58 hours a month.
Consider that some diehards devour an entire season of a Netflix original series in a weekend: That's 13 hours for, say, this month's new batch of Orange Is the New Black. In the old days, that kind of binge would have only left you enough credits to watch half of the last season of Bloodline and then pace in circles until the calendar turned and you could finally find out just how much more the Rayburn family would sweat.
2. The DVD/streaming divide
THEN: Publicly, Hastings was cautious about proclaiming a streaming revolution. "The market is microscopic," Hastings said. "DVD is going to be a very big market for a very long time." Their 2007 audience of 6.3 million subscribers were accustomed to DVDs, so better to not alienate them. (That would come a couple of years later.) And the DVD format still reigned: While Amazon was offering streaming movie rentals, the iTunes store hadn't yet launched, and DVD revenue had just set a new high in 2006, with around $24 billion in sales and rentals.
NOW: The phrase "a very long time" is relative in the tech world, where new industries get replaced fast. 2006 would turn out to have been peak DVD, and sales steadily dropped thereafter. Amongst Netflix customers, streaming would surpass DVD use in 2010, leading Hastings to conclude that "a very long time" equaled three years. "By every measure, we are now primarily a streaming company that also offers DVD-by-mail," Hastings said in an October earnings call. (He would soon rashly decide to separate his streaming and DVD business in the quickly backtracked Great Qwikster Debacle of 2011.)
Today DVDs continue their slow march toward becoming an artifact that will befuddle the next generation, in the same way cassette tapes flummox millennials. Last year, the $6.2 billion collected by streaming providers finally eclipsed DVD sales, which were tallied at $5.4 billion.
3. The tech
THEN: As mentioned above, to download Watch Now you had to be on Internet Explorer and Windows. (Mac users wouldn't get access until late 2008, and the iPhone itself didn't debut until late 2007.) But critics were impressed by the platform; even Slate was less contrarian than you'd expect:
"Despite my initial annoyance over the format business, setting up Watch Now took about 10 seconds. I didn't even need to reboot! The viewing format is elegant, clean, and simple…. I have a decent Internet connection, and it never took more than 30 seconds for a movie to get started. The quality is good. I'm no connoisseur, but to my untrained eye recent titles like The Prince and Me and The Puffy Chair look just barely sub-DVD. Older movies like Living in Oblivion and 2010, however, look about as gnarly as VHS."
CNET was also generous about the quick load time, and deemed image quality good… you know, for a computer. "It's not quite DVD quality, but it's close. It's definitely a tad bit softer and we could see some video artifacts, so we probably wouldn't want to use it as our main method of watching movies. On the other hand, it's completely acceptable for watching a movie at your computer, where you're probably not expecting home theater perfection."
NOW: We do expect home theater perfection, and largely get it, with most titles in HD. Buffering can occasionally be slow, but that's usually your internet provider's fault, or yours for having too many devices going at once. But to be fair, even if we get all those handicaps worked out, we'll still never be completely satisfied with Netflix, as tech satisfaction is an asymptote. As Louis C.K. put it in his classic "Everything's amazing and nobody is happy" routine, the better technology gets, the more annoyed we'll be that it's not perfect. So for the sake of our comparison, let's just say that since 2007, we've always been as happy with Netflix's streaming quality as a greedy human being can be. We'll always find something like, I don't know, widescreen cropping, to annoy us.
4. The selection
THEN: Watch Now first debuted with just 1,000 titles. Slate wasn't particularly impressed:
"I can honestly say… that in the 12 or so hours I've spent watching Netflix's streaming offerings, I've seen nothing I would pay to see. At the risk of sounding needlessly harsh, I found the offerings impressively bad, as though some schlock curator from an Ivy League cinema studies department was called upon to select the dreckiest soft-porn screwball comedies ever made. Find Caddyshack too highbrow? Try Golfballs! You won't find any of Kieslowski's Trois Couleurs movies. You will find Andy Sidaris' Triple B trilogy, which features more 'bullets, bombs, and babes' than you can shake a stick at. If you search hard enough, you'll find a handful of newish highbrow releases like Sherrybaby and Conversations With Other Women. But good luck finding enough to keep you entertained."
There was a lot of dreck, but note that Netflix subscribers were then accustomed to being able to pick from its vast DVD library, so, comparatively the compact streaming list likely seemed like a very insulting sample size. Because, to be fair, Watch Now also included a smattering of movie classics, many of which, a decade later, still hot potato between Netflix, Amazon and, Hulu: 12 Angry Men, A Clockwork Orange, Misery, When Harry Met Sally, and the omnipresent Chinatown. There was some solid '90s popcorn (True Lies, Waterworld), and on the TV side there were some gems like 30 Rock and, foreshadowingly, the original BBC House of Cards.
NOW: When it comes to nailing down how many titles Netflix streaming currently offers, the company is mum (as they are about most of their data): Varying reports last year estimated 2016's combined TV/movie selection last year from 5,000-7,000, a number that a Barclays report estimated to have shrunk by 28% from the previous year.
Long-time subscribers have certainly noticed the waning of familiar titles over the years: In 2008, Netflix made a deal with Starz to sublicense their cable library of 2,500 films, which included such respectable films as Scarface, Scream, Beetlejuice, and Big. (Starz CEO Chris Albrecht would later bemoan the $30 million deal as "terrible.") When that deal phased out in 2012, subscribers grumbled about the drop in memorable titles. Netflix would go on to sign other huge deals to amp up their marquee content, including a massive $300 million-a-year deal for recent Disney movies, including Pixar and Marvel titles. But let's face it: the library ain't what it used to be.
However, a large selection of known quantities doesn't seem to be Netflix's goal anymore, a company that is spending $6 billion a year on its own exclusive original content, from more TV series than the human eyeball can consume to indie films plucked from Sundance and Cannes.
In 10 years, Netflix has become the giant of streaming, to the point that it's often used as the eponymous term for online video. (Nobody says, "I'm just gonna go home and Crackle.") But its dominance is being challenged by Amazon, which is racing to catch up by devoting $4.5 billion to video this year, so who knows what the streaming landscape will look like in another 10 years? Will Netflix have put the broadcast networks out of business? Will it stream in 3D? Or will it feel to us then the way that MySpace does today?
It is impossible to predict, but judging from the last decade, two things are certain:
- It will only get better -- but we will still have things to complain about.
- If not them, then someone, somewhere, will still be streaming Chinatown.
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