Holman Jenkins Jr. on the future of Netflix Netflix CEO Reed Hastings's stock is down 70 percent after he raised prices on those who use both streaming and mail-order services and then tried separating the two services. Holman W. Jenkins Jr., writing in The Wall Street Journal, likens him to "Steve Jobs thumbing his nose at those who wanted a floppy drive with their iMac or Bob Dylan blowing off the folkies and playing rock and roll." Like them, Hastings is forward thinking, Jenkins said. Yet his company lost 800,000 subscribers. The "real problem" isn't "surly and sentimental" Netflix customers though, it is that the company "doesn't license nearly as much content for streaming as it does on disc." Most of the time, something you wanted to watch was available only on disc, but its presence there "seemed to imply it was only a matter of time until Netflix's huge DVD library would be available for streaming." Hastings "broke the spell," informing shareholders that they'd be wrong to expect that. Netflix critics have argued the company is doomed because it won't be able to raise prices enough to provide all that premium content. "But the obvious rejoinder is: Whose customers will? Implicitly the critique blamed Netflix for not being able to win a race that nobody will win." The lesson here is that no company will ever unite all the content under one price. "In the future, you'll still need a search engine and a credit card, and you still won't find what you're looking for. In such a world, there's no reason Netflix can't survive and prosper with a streaming proposition that amounts to 'all the content that $8 per month will get you.'" Netflix's "great innovation" was finding "a price point" for which users would pay for a bunch, but not all, content. Other competitors will compete by finding their own niches. "The biggest risk today for Netflix may be short-term: Running out of cash and investor confidence even while a winning position is still potentially within its grasp."
Thomas Friedman on Obama's foreign policy "Barack Obama has turned out to be so much more adept at implementing George W. Bush's foreign policy than Bush was, but he is less adept at implementing his own," writes Thomas Friedman in The New York Times. Obama found the "right strategy" for Bush's war on terrorism. Obama "keeps costs and risk down" by coordinating intelligence, targeting known terrorists, using limited intervention, and working with on-the-ground allies. Iraq and Afghanistan could have been as focused and limited, but "turned out to be like a bad subprime mortgage -- a small down payment with a huge balloon five years down the road." Yet while implementing Bush foreign policy, Obama "has been less successful with his own foreign policy." His Arab-Israeli diplomacy has failed, he can't engage with Iran, he "doubled down" in Afghanistan, and Russia and China "pursue their interests with scant regard to Obama’s preferences." It's not all Obama's fault, though, says Friedman. "Obama's frustrations in bagging a big, nonmilitary foreign policy achievement are rooted in a much broader structural problem," Friedman thinks. "The world has gotten messier and America has lost leverage." Where Kissinger could work with just three leaders -- the Syrian and Egyptian autocrats and Israel's Golda Meir who held a huge majority -- to make a deal in the Middle East, Obama and Hillary Clinton are working with dead or dying regimes in Egypt and Syria and a "fractious and weak Israeli coalition." Diplomacy requires negotiating with other governments, but today, we have to create governments with whom to negotiate. With established nations, our weakened economy gives us less leverage. "When a nation is in debt as deep as we are -- with severe defense cuts inevitable -- its bark is always bigger than its bite."
Nicholas Merrill on the Patriot Act "Sometime in 2012, I will begin the ninth year of my life under an FBI gag order, which began when I received what is known as a national security letter [NSL] at the small Internet service provider I owned," writes Nicholas Merrill in The Washington Post. In 2004, an FBI agent delivered Merrill a letter, which "demanded that I turn over information about one of my clients and forbade me from telling 'any person' that the government had approached me." Merrill went to the ACLU and filed a constitutional challenge to the NSL provision of the Patriot Act. Years later, the government has used NSLs to collect info on hundreds of thousands of people, but their operations remain too secret for Americans to engage in open debate. Merrill was unsure in 2004 whether he could be arrested for telling the ACLU about the letter, and as he pursued his suit, he had to lie to family and friends about where he was going. The FBI claimed that if he identified himself as the plaintiff, "irreparable damage to national security would result," but he has since been partially ungagged. He argues the FBI's concern was actually "motivated by a desire to insulate the FBI from public criticism and oversight." And still, he cannot discuss the information the FBI sought or many other details of the case. "Now the FBI is supposed to notify NSL recipients that they can challenge a gag order -- but the government refuses to say how the court's ruling has been put into practice, or how many gag orders have been issued, challenged or reversed." When Americans find out how the government "secretly interpreted the Patriot Act," he says quoting Sen. Ron Wyden, to conduct surveillance on its own people, "they will be stunned and they will be angry."
Margaret Carlson on keeping Joe Biden The "vestigial" position of vice president "persists," though VP candidates more often hurt a ticket (as in the case of Sarah Palin) than significantly help it, writes Margaret Carlson in Bloomberg View. VPs can hurt an administration, too. Dan Quayle was "too lightweight," Spiro Agnew was "corrupt," and Dick Cheney was "sufficiently toxic." "On the other hand, Joe Biden is about as good as vice presidents get," Carlson says. He grew up working class, "has the bouncing personality of a Saint Bernard," he's learned a lot about foreign policy in his years in the Senate, and he's overcome personal hardship. Still, "Biden has a penchant for gaffes." Republicans have been angry recently over one such remark. Obama's jobs bill would provide funds to keep several hundred thousand teachers, police officers, and firefighters employed. When someone in Philadelphia suggested the bill would be a "temporary" fix, he replied "Let me tell you, it's not temporary when that 911 call comes in and a woman's being raped ... It's not temporary to the guy whose store is being held up and a gun is being pointed to his head." Critics said he used "fear tactics" to play politics. Biden should remember a time when Republicans helped him pass bills to put more cops on streets, but he can also recognize that Republicans currently "intend to immerse the economy in liquid nitrogen, then revive it only after they have captured the White House in 2012." The "minor furor" also revives rumor that Obama could replace Biden with Hillary Clinton. "This makes no sense," Carlson says. Biden's impolitic remarks weren't actually that impolitic. They "exposed Republican hypocrisy. Are Republicans so twisted by their hunger for the White House that they don't hear themselves arguing that more police on the beat won't reduce crime?" Making a switch would "introduce risk into Obama's electoral equation without any promise of reward."
Edwin Durgy on Muammar Qaddafi's wealth "The Los Angeles Times reported over the weekend that deceased Libyan dictator Muammar Qaddafi had 'secretly salted away more than $200 billion in bank accounts, real estate and corporate investments around the world before he was killed,'" writes Edwin Durgy of Forbes. Other outlets took that to mean Qaddafi died the richest man in the world. And in fact, it would have made him one of the richest individuals in history. Durgy clarifies, though, that "Forbes has long separated rulers and dictators from our annual rankings of the World's Billionaires, distinguishing between personal, entrepreneurial wealth and wealth derived largely from positions of power, where lines often blur between what is owned by the country and what is owned by the individual." By those rules, rulers in Thailand and Dubai with 11-figure personal worth are excluded from the Forbes rankings. In Qaddafi's case, most of the $200 billion were held in the name of the Libyan government or other organizations. "As such, while agencies of Qaddafi's regime administered the funds in question, the vast majority of those assets were never owned directly by Qaddafi or members of his family." As Qaddafi lost power, the U.S. and others were able to freeze Libyan government assets, to prevent him from grabbing them. An official cited "'safeguarding [the assets] for the Libyan people' as the rationale behind the action, making explicit to whom the assets belonged in the eyes of the United States government." The reasoning for considering the money his personal fortune would be that "he clearly used funds for personal gain -- not for the country's benefit." Still, "Qaddafi appeared content to use Libyan investment accounts as personal trust funds, and stopped short of seizing the principal," making him something other than the richest man in the world.
This article is from the archive of our partner The Wire.
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