Netflix - Fad Diversion or National Security Threat?

I just posted a comment in response to this post on Herb Greenberg’s Market Blog. Since it’s a moderated blog, Herb justly reserves the right to edit or reject as he sees fit, so I figured I’d also archive the full post here, in a barely remixed version with bonus pithy one-liners. I hope Herb receives my original comment on his site in the cheerful spirit intended, because I’m truly grateful for his faithful juxtaposition to Cramer’s version of Project Mayhem, aptly called Mad Money.

FIRST RULE OF MAD MONEY: “Never buy stocks because of Mad Money.” SECOND RULE OF MAD MONEY: “Never buy stocks because of Mad Money!” THIRD RULE OF MAD MONEY: “If it’s your first time watching Mad Money, you MUST FIGHT the emotional impulse to buy stocks soley because mentioned on Mad Money!”

Hey, we all know that the entirety of the programming on CNBC is 5 parts entertainment, 4 parts promotion, and 1 part information, but still, I’m glad Herb is there to help keep Cramer’s ego from expanding so far that it collapses back into itself, creating a massive black hole. I don’t know about you, but Hurricane Cramer is just fun as hell to watch, so I wouldn’t want him to turn into a black hole. So long as the gravitational reality of Herb Greenberg exists – well, Herb and YourMoneyWatch.com, anyway – the world will continue to enjoy the peculiarly beguiling bombast and ineffibly endearing effigy more commonly known as Cramer. There may well be an entirely new eschatology in and amongst those thoughts, but enough already, here’s the post:

I too hate Netflix. Before Netflix, my family would randomly go rent a movie or three a month from Blockbuster. All too often, we’d also get busted for a day or three of late fees for one reason or another. I figured we were pretty average to below-average volume customers and that Blockbuster made most of its real money on late fees from busy folks like us. Then we did the cost comparison. For the same monthly costs we averaged with Blockbuster, we could have as many movies per month as we’d like and no late fees. Given our fairly boring pattern of use and moderate record of return delinquency, we estimated we would need to watch 3 to 4 movies per month to break even. Heck, if we threw in a fifth, we’d definitely be coming out ahead on the monthly entertainment budget. For a family of three, it seemed fairly reasonable that each of us might watch an average of 1.5 movies per month, so we gave it a shot.

What a mistake.

It didn’t take long to notice the amazingly efficient Netflix ordering, queuing, delivery, and turn-around system. Movies regularly arrived a day earlier than promised and the Netflix web site recommended movies that we might not have otherwise every bothered with. We said, “What the heck, it costs no more, let’s put a few more in the queue.”

This only made things worse. Suddenly, we started discovering a world of commentaries on cool new movies. Since there was no rush to return the movies, we had plenty of time to explore all the extended features made possibly by the DVD format. We NEVER would have wasted such time with rentals from the brick store. That’s “brick” as opposed to “click,” of course. But the trouble didn’t stop there.

Since additional movies didn’t cost any more, we threw in a documentary here and there, some old classics, and we were surprised to discover some absolutely fantastic films that may not have faired well in theaters – like Sideways, Donnie Darko, etc., and others that subsequently made a resurgence in the retail theater market – foreign films that we NEVER would have “wasted” the extra $1.99 to $3.99 to rent from the local video store.

Gradually, we found ourselves becoming interested in the CRAFT of movie making, almost entirely because we had accidentally gained access to so much of that craft. It’s as if the more data points we gathered, the more we saw patterns emerge, differences highlighted, and we found ourselves experimenting, sampling sets of movies from a particular director, or producer. We found ourselves watching The Original version of Recent Remakes, just for the sheer diversion as well as for the history lessons in film making, and the nostalgia of 1940’s, 1970’s, 1990’s depictions of technology. Hilarious to see some of our own old favorite 1980’s “mobile” phones!

Once our son left for college, my wife and I wound up with an optimal plan of 4 movies at a time; 2 each. We can each get “one for our own taste” and “one to share.” And with two in rotation, the old-fashioned random whim can be satisfied at any time, but without a trip to the brick store, and without being hit in the head with a brick’s worth of late fees.

The bottom line is that we started out as pretty typical movie renters, but thanks to Netflix, we now find ourselves using the world “film” much more than we would have ever imagined. Puh-lease! Don’t you just hate those pretentious “film” people?

How embarrassing. I almost feel like one of “them” now. I hate myself and I hate Netflix for making me hate myself. Hate, hate, hate, hate, hate.

Netflix effectively ruined my twenty year-long traditional 16 hour work day, cutting it down to a mere 10 or 12 so that I have time to chill with my family and indulge in this sordid, fantasy-pandering, mail-order, plasma-centric diversion. Lately, they’ve even gone and Web 2.0-ified the Netflix.com site, making it even more fun and simple to use, and made it super easy to connect with friends to share feedback and recommendations, all serving to feed a growing American “film” feeding frenzy. It’s not even about mere “movies” anymore.

In these ways, Netflix has clearly negatively impacted my own productivity and, by extension, could very well be a threat to the entire economy. Think about it. What would happen if more people engaged with Netflix the way that we have? Less hours of work more hours of leisure. It’s a real danger. Netflix could become a serious threat to national competitiveness; a fatal single step down that slippery slope into a sea of slack; and maybe even the beginning of the end of leisure suit Larry Kudlow’s greatest story never told. “Netflix: Fad Diversion or National Security Threat?” on the next Kudlow and Company.