@ pcE11: Lessons Learned From Netflix And Others On New Digital Video World

The same kind of disruption that changed the tech is coming to television and films, warned panelists Thursday at paidContent Entertainment 2011. When the costs of producing content plummet at the same time demand for content has never been higher, a whole new class of entrants has a chance to make a splash.
But be careful, warned Mark Suster, partner at GRP Partners: “being too early is the same as being wrong.” Digital video technologies that aren’t quite ready for prime time can hurt a company’s brand and make it even easier for upstarts to find disgruntled customers.
Enter Exhibit A for how to rankle your customers: Netflix (NSDQ: NFLX). The panelists, who included Suster, Jason Deal of Initiative, William Quigley of Clearstone Venture Partners, filmmaker Jamie Patricof and Rick Allen of Snag Films (which announced two content deals earlier in the day at the conference) shook their collective heads at how Netflix bungled the goodwill they had earned over the years among both consumers and the entertainment industry in just a few short months.
Because of the disruption in costs and the need for big brands to have quality content associated with their brands, in a way, content is once again expensive, Quigley said. Netflix didn’t realize exactly how dissatisfied customers were with its streaming-only offerings and overjudged how quickly people would be willing to give up DVD service without the same quality available from the streaming side.
And to top it all off, filmmakers like Patricof weren’t making all that much money from Netflix in the first place, he said.