Criterion Bungles the Future

The Criterion Collection has long stood for quality, demanding the finest video/audio transfers possible along with the best supplemental materials available. With its reputation for high quality, its recent decision to abandon Netflix streaming services for exclusing (and inferior) Hulu+ services is puzzling. Do they really need the brand recognition?

For foreign movie fans and art house aficionados, The Criterion Collection has long produced the Mercedes of the DVD market. Inheriting exclusive access to Janus Films put the company in the right position to service discriminating film buffs, and the company delivered a large catalog of quality work--giving a film the full "Criterion treatment" is akin to providing vast resources that make attending film school irrelevant.

Typical Criterion Collection DVD/Blu-ray releases contain scholarly commentaries and essays, background documentary material, interviews with filmmakers and actors, and miscellaneous supplemental material. And with a roster of filmmakers that causes cinephiles to drool: Fellini, Bunuel, Hitchcock, Kubrick, Bergman, Kurosawa, Trufaut, Godard, Cocteau, Antonioni, Ozu, etc.

On the other hand, The Criterion Collection did produce DVDs for two Michael Bay films that continue to boggle the mind. Just what was so noteworthy about Armageddon and The Rock that warrented the Criterion treatment? Published reports indicated that "on occasion" the company needed to produce capital, so it may select more commercial films if they have something noteworthy about it like its special effects or visual style (with Michael Bay that must translate into the "blowing things up" niche).

I was going to ask Criterion Collection president Peter Becker about this and about other directions he planned for the company in a phone interview that Criterion had requested and scheduled with me a few years ago, but he stood me up.... and never re-scheduled. I had forgotten about that until learning yesterday about the company's latest business move -- that it was closing down its streaming services via Netflix and going with an exclusive contract with Hulu.

My first reaction was total shock. It makes no sound business sense to abandon the company that stands on top of the heap for streaming media--a debt free company that dominates the streaming market and has poised itself for the future by heavily reinvesting into a streaming infrastructure that currently stands at least two years ahead of the competition. Netflix hasalso enlisted a plethora of partnerships that further enhance that stance. A recent example I've heard about is that Samsung and another major television manufacturer will soon have a Netflix logo button right on their remote controls that grant instant access to their streaming services.

So I traveled to Criterion's Facebook site for details, finding the following excerpt that explains their decision:

We love Netflix, and they are still one of Criterion's most important partners, but Hulu demonstrated a real commitment to the Criterion brand that persuaded us they would be the better home base for our streaming efforts. It has never been easy to find Criterion movies on Netflix — "Criterion" is not even a searchable term there. Compare that with Hulu's willingness to develop a whole area of their site around us, brand the films associated with us, and develop the capability to show many of our supplements alongside our films. The energetic, independent, creative team at Hulu was willing to build their business around us in a way that just wasn't in the cards anywhere else.

We chose to make a deal with Hulu because we feel the Criterion brand will in the long run be better represented there. As we put up more films and and our supplements too - which have to be made available with the films - we felt that the treatment of the brand and flexibility within Hulu and Hulu Plus would enable us to provide a better user experience at the end of the day. We will continue to support Netflix on the package goods side and continue to work with them to provide Blu-ray and DVD copies of the films we release, but all of the films that are currently on Netflix streaming will be down by the end of the year. In case you're curious, we're as committed as ever to the physical goods side of our releases and will publish more DVDs and BDs this year than ever before.

It appears that The Criterion Collection's biggest beef with Netflix was that it didn't grant more name recognition to them--instead using film titles, directors, and actors in their search functions. The horror! As if REAL film buffs are not already aware of which films are part of The Criterion Collection's exclusive releases.

I'm not that different from other non-mainstream film fans who puruse The Criterion Collection's website to find out what their upcoming DVD/Blu-ray releases will be. If it's a film that I'm not sure that I want to own, I habitually put it in my Netflix queue for pre-viewing purposes... and may purchase the hard copy disk if the film warrants. Although the Criterion DVDs will continue to be a part of Netflix's catalog, streaming services offer more convenient options.

Did the Criterion Collection really consider its audience before reacting against Netflix. Film geeks had long ago abandoned mainstream video outlets like Hollywood Video and Blockbuster because they did't offer much in the way of foreign, indie, and art house fare while Netflix afforded access to virtually everything available on DVD. We all flocked to Netflix and love them. How are those video stores doing today?

Does Criterion think that most of us loyal film geeks have tied into Hulu streaming so we can watch vintage TV on our computer screens? Or that we will tolerate inferior Hulu+ video streaming quality (and be placated with promises of equalling Netflix quality down the road)? Although Hulu is attempting to expand into the streaming market, they are way behind Netflix and would require most people to purchase additional hardware to tap into its Hulu+ offerings.

Netflix CEO Reed Hastings back in 2003 said in an NPR interview that the reason the name Netflix was chosen was that they did NOT intend to limit their service to DVDs--that they were positioning themselves to offer films via broadband services as soon as the technology was in place. They have stayed with that vision over the years, and even the boys on Wall Street have finally caught on as its stock has recently soared to over $245 a share. (I only regret that I didn't buy more shares when it was selling for 30 and had dropped down to 10)

It appears that The Criterion Collection is striving to remain true to its unique market by going with a smaller company more willing to promote its brand. I find that humorously ironic since their president ignored my interview appointment back in 2003--which I interpreted at the time to be a typical corporate response to a small online film critic who served a far smaller niche than they did.

From my point of view, The Criterion Collection has blundered with their Hulu streaming deal. While championing quality DVD releases with the finest video/audio quality and high standards for supplemental material, The Criterion Collection has abanded their Mercedes standard and selected a Yugo to host its streaming yard sale. Although this is not likely to cause Armageddon to their business model, it's certainly not a Rock to expand its base upon.