Netflix shares falling: The McDuck-Beagle Boys theory
I have a theory about why everything has gone wrong with the once-beloved, now-maligned Netflix. In simple terms: They were Scrooge McDuck, and they decided that they wanted to be the Beagle Boys — the gang of hoodlum bank robbers who conceive crazy schemes to rob Scrooge McDuck. One year ago, Netflix was practicing a grateful backstroke through a mountain of money. There was some trouble on the horizon, of course. Content providers were starting to create their own video-streaming services, and mailing DVDs was costly, and users would fly into a blind rage whenever the site slightly updated its interface. Scrooge McDuck constantly faces down threats from competitors like Flintheart Glomgold (Amazon Instant Video) or people who want to undermine his business model, like Magica DeSpell (Starz’ decision to remove its content from Netflix). There were ways to solve these problems. Netflix had an adoring constituency. Everyone you knew was watching Party Down. Your parents were starting to use “Netflix” as a verb.
It was at this moment, though, that Netflix decided to become the Beagle Boys:
Netflix announced it was bifurcating its subscription model and introduced the world to Qwikster. Netflix announced it was going to become a content producer and snapped up glittery projects: David Fincher’s House of Cards, the Arrested Development reboot. Netflix announced it was meeting with various cable companies and declared itself a potential threat to HBO, perhaps in homage to the scene in The Assassination of Jesse James by the Coward Robert Ford where Ford points out that he and James are basically the same man because they both have blue eyes.
Of course, the problem is that the Beagle Boys have spent decades failing to get even one dollar from Scrooge McDuck’s money bin. Likewise, each of Netflix’s crazy schemes has thus far comically backfired, which explains why — as reported by the Wall Street Journal — shares in the company fell 13 percent yesterday. Netflix plans to add 7 million U.S. subscribers this year, which some analysts say is doubtful. It’s worth pointing out that the company’s craziest scheme of all — original programming — is still in its infancy, since House of Cards and Arrested Development won’t air till late 2012 and 2013, respectively.
Embattled CEO Reed Hastings told the Journal, “We said it’s a three-year process and we’re six months into that three-year process,” Hastings said. A three-year plan? In the go-go Internet world, that’s the craziest scheme of all.
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