Netflix's pain may prove content-owners' gain, in two ways. First, Netflix need content now more than ever. Second, the company's stumble is likely to embolden competitors like DISH Networks' Blockbuster and Amazon, prompting them to open their wallets for more and better content.

Of course Netflix will only be able to follow through on plans to spend even more than the $2bn-plus to which it is already committed in streaming rights over the next five years if subscriber losses are modest. Company CFO David Wells told a Goldman Sachs media conference September 21 that the company is considering everything short of going back to the old pricing structure as ways to ameliorate the pain and keep its clients. There are some pretty obvious structural fixes - even if just instituted for the short-term - that would make the separation of the services less painful for the 12m subscribers that still want both discs and streams come this quarter's end: both queues available on both sites, for example, integrated queues, and title searching across the two inventories on both sites.

This wouldn't be the first time the company has turned on a dime to protect an early-mover advantage. Netflix had just raised the cost of its most popular three-out plan in the mid-2000s when the early popularity of Blockbuster's Total Access service - that allowed in-store swapping of discs, which heavy consumers loved - prompted it to undercut Blockbuster's pricing to hang on to them. Similarly, soon after its 1998 launch, the company dropped disc sales as a business line to focus on the subscription-rental opportunity - even though sales were the lion's share of revenue - because it was clear it would not be able to compete with Amazon and Walmart in that low-margin business.

Wells' comments suggest accommodations will be made which, if they make life easy on consumers as they adjust to the two-site approach, should keep most customers aboard. That would allow the company to devote the profits it will now be able to make on disc rentals at the higher prices to streaming rights for more current and popular movie and TV content. That would be a positive for film studios and TV networks.

Netflix built up enormous goodwill with its subscribers helping it to provide both the fastest growing (in dollar terms) disc-rental model and the only paid internet exploitation model to generate substantial traction with consumers, and revenue to content-owners. That goodwill should give it a chance to get this transition right. The company now seems to understand that it was moving too fast and lost sight of some key elements (such as integrated queueing) that contribute to a quality service. We expect it to slow down to let its customers and service catch up. But there's no reason to expect it to change its fundamental direction away from disc rentals and toward remaking the network delivery of video content in its own image.