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Megan McArdle

Netflix Is Caught Between a DVD and a Hard Place

Netflix's shrinking library suggests that the golden age of streaming video may already be behind us.

Everyone knows that Netflix Inc.'s DVD-by-mail service is a sort of transitional phase between the bad old days and the glorious future. Like the socialist state, it was eventually supposed to wither away when the era of plenty arrived. By 2011, every other article I read on the Internet seemed to describe how the author was "cutting the cord," getting rid of cable television in favor of streaming movies and television on Netflix and Hulu. Usually, this was followed by exhortations for readers to do the same and teach those cable companies that they can't charge such outrageous prices for their content. Stupid cable companies! Netflix will show them!

This was, of course, just about the time that Netflix started running into some trouble. There was the ill-fated attempt to relaunch its streaming service as Qwikster. Then it lost its deal with Starz, which had provided most of the best bits of Netflix's movie library. As time wore on, more of its content deals have expired and not been renewed. Its movie library is no longer actually a good substitute for a good movie rental place. It's a place to catch up on television shows, and you can generally find a movie you're willing to watch. But as Felix Salmon astutely notes, Netflix is no longer where you go to find something great -- it's where you go to kill some time with whatever it has available.