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Netflix Creates Qwikster For DVD Only Business
Frankie70 writes "Netflix CEO Reed Hastings just dropped a bombshell. In the wake of a rapid decline in Netflix's stock price last week, Hastings is taking a bold step by separating the DVD and video streaming services. The DVD-by-mail service will now be called Qwikster, and the streaming service will maintain the Netflix brand."
All I can keep thinking when I see that name is 'Quixtar'.
You're going to cheapen youself with a 'ster' name? Really?
Nothing like killing off your brand in a hasty fashion. Although I'll be curious to see how they do this I doubt I'll be sticking around much longer.
God: When you do things right, people won't be sure you've done anything at all.
Wow, this is corporate stupidity at its finest. How exactly will this make more people subscribe? The only reason for this is that the CEO is freaked out about a stock drop and is overreacting. If anyone deserves to be fired it is the Netflix CEO. Everyone knows that the most powerful tool in business is brand recognition, and they are just throwing it away. From what I understand most of the people that dropped the DVD service did it because they weren't using it and it was just a good reason to do so. If anything this move will force more people to drop the DVD service as they will lose they que and no one will like having to pay 2 separate bills from same company. Way to go Netflix you just make a small problem much bigger by overreacting. I have a feeling that their stock is going to tank today.
They might as well have called it "iQuikster". The whole "-ster" thing is just as diluted as any of the other cutesie Web 2.0 brand conventions.
This is just stupid, but the worst part is that, it seems to me like they didn't even think through all the implications of they way they are doing this. For example, take the following from the official netflix blog.
User asks: " If a film I search for on Netflix is not available for streaming, will the website still tell me if the DVD is available? Or must I search twice?"
CEO Reed Hastings responds: "ouch. You'd have to search the second place if we didn't have it in the first place."
Ouch? Are you serious? Ouch? To me, that reads like "hmmmm, we hadn't really thought about that".
i only have netflix streaming because my older kid always likes one or two shows on it that makes it worth it over buying the dvd. otherwise the selection is so bad there is nothing to watch.
with apple's new rules i can just buy and stream from the apple tv and dump my cable DVR as well
They're going to start renting out xbox 360, ps3 and wii games. FTEM (From the Email):
"One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games."
'Other Improvements will follow' for qwikster, although who knows what other disc-like products they will add, or what the pricing on renting video games will be. Since they're a little late to the video game side of things I would hope that they undercut Game Fly.
So how about an article that documents the effect on us, the customers, not on speculators and investors?
Here, let me get that for you:
Crib notes: squeal, piggies, squeal.
If you were blocking sigs, you wouldn't have to read this.
... if they actually had all of the content available for streaming, but as it stands only about 10% of my Queue right now is streamable. I think what would've been easier to digest for the masses would've been an introductory price of like $4/mo. Also, maybe they could've told us a bit beforehand.
All in all I like Netflix and it makes me sad to have to make a hard decision on if I should let them go. Much like a baby bird that once gave me great DVD streaming and rentals, now I have to decide if I should keep my poor bird at double the monthly cost, let it fly away and be devoid of a big part of my media capabilities, or instead cut it in half and have to deal with partial entrails, never quite getting the same experience.
Why of all things QWIKSTER? Why not MailFlix/NetFlix. Much more in line with the service capabilities.
Dear Reed:
I don't know you and this morning you send me an email telling me you messed up but yet I have never heard of you. I have a feeling you messed up again and didn't think this through. So now I'll need to have TWO accounts? Please reply when you know what you really want to do.
Signed
A new disgruntled customer.
God: When you do things right, people won't be sure you've done anything at all.
I lolled
http://i54.tinypic.com/fo3uav.png
I add movies to my DVD queue now and they magically sometimes appear on my Instant Queue without any effort on my part. I don't search for streaming content. Their catalog isn't that extensive. Sometimes I browse, but I never search it.
This might make me cancel my streaming service. I kept both during the price transition.
Netflix CEO Reed Hastings has got to be an MPAA Shill planted to destroy cheap internet movie streaming. It's the only explanation. Has Hastings always been CEO of Netflix - I'm too lazy/disgusted to look, but if so I propose either that he has been killed and cloned, or brainwashed early on to be an unwitting sleeper agent, who has now been triggered to commit his acts of espionage. These are the only explanations for this kind of disaster.
"Sorry we screwed you over, so in response we'll make things extremely inconvenient."
Dollar vote people, dollar vote.
One of the reasons I decided the price hikes were acceptable was that Its "month to month" in that I was going to be able to do the streaming only service, consume the new content there, than switch back to the DVD service for a couple months until they get new stuff available on streaming.
If this makes it hard to do that it further reduced the value to me and starts to make competitors like Amazon and Hulu+ look interesting. I still think Netflix is probably the better value proposition at the moment, even with the price hikes; but if this means I can't easily switch between one type of service and they other, I might have to start looking at other options for content again.
This is a dumb move, all around AFAICT. Its basically an accounting trick to make the EPS of Netflix proper look a little better, investors won't wont be fooled, customers like me will be aggravated.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
Here's the actual blog post from Netflix instead of the Techcrunch blogspam that quotes it:
http://blog.netflix.com/2011/09/explanation-and-some-reflections.html
Well, I just got a new PS3 that I'm using for a media center manager and I had planned to signup for Netflix in the next week, but in the wake of this news I'm going to be holding off to see what the heck they are doing. First the 50% increase in the plans and now a complete divergence of the company. I'm sorry I only give money to a company that I feel I can actually get service from and right now that Isn't Netflix/Qwikster.
So now when something in my queue is available on instant I won't be able to see that unless I specifically search a different site. (For an 100+ item queue, that's unreasonable).
Now when I'm looking for something to watch, I'll have to check Netflix first, then Qwikster.
I can't even see this as sensible business plan. The world is moving to streaming, so Netflix is going to create a new company that ships old discs? Do they really expect this business will still be growing in 5 years?
Before Netflix split the plans, I had assumed that Netflix would slowly raised prices on the DVD-by-mail service before finally killing it. In the meantime they would work on expanding their content, and lobbying Congress to make it as easy to broadcast video as it is for radio stations to broadcast music (no individual negotiations, just a single company to make payments to).
Instead, their streaming library is shrinking and they're cutting away the DVD business that makes up for it. I think Reed has drank a little too much of the Kool-Aid. He starts out his post talking about how well Netflix works on TVs. Yes, Reed, the software is great, but the selection is terrible. As an addition to the DVD service, it was great and promising, but it's not ready to be its own general market product yet.
The right to protest the State is more sacred than the State.
The DVD rental by mail business is a dead end, and Netflix can more easily sell it off after they figure out streaming deals. I never understood how they make money - I pay about $8/month for renting a max of 1 DVD, and I get about 2 DVDs by mail each week. That's 8 each month, and with postage/envelopes each way at about $0.50, that's $8.00 - not much profit here. I suspect Netflix wants to emphasize to movie studios that DVDs are a dying business, and to get their streaming act together.
So, how do the alternatives stack up at this point? Amazon's VoD vs. Blockbuster On Demand vs. Roku vs....? Especially in terms of title availability?
It's not stupid. It's NetFlix acknowledging that streaming is how people will watch content in the future. They are putting themselves 100% on the bleeding edge of all-streaming with no physical media. Now, there are a whole bunch of people that still want DVDs...and that's why they are still playing in that area at all. However, five years from now, when no one wants DVDs at all, they can just kill Quickster. Meanwhile, NetFlix becomes the dominant king of streaming content, as they can dedicate themselves 100% to that. It's not about innovating both business models anymore. It's about milking the DVD market as it dies while still allowing themselves to focus entirely on the streaming market, which is the future.
Missing from this submission is the news that Netflix/Qwikster will now offer game rentals. I suppose that's not a big deal to everyone. I'm sure gamefly isn't happy about it, but competition should be great right? Personally I rarely if ever rent games, since I tend to play a demo first (and if there isn't one, pirate) and if I like the game I purchase it through Steam, so that I can get up-to-date patches, play online, and have that warm fuzzy feeling of supporting the developers. I wish the industry was more receptive to demos, because they do work, for good games at least.
For example (an off-topic gaming story follows here), I recently watched X-Men: First Class and the American/Soviet ships primed for battle with each other put me in a Red Alert mood. I had never played the third game in the franchise, because when it came out I was raiding heavily in WoW and not playing anything else. Anyway, I went to check the price on Steam to find out if I had to get a pirated version as a sampler first, and to my surprise there was a free demo. The demo only offered two missions, but after spending an hour messing around with the various units in one mission I decided it was certainly worth the $20. Moral here is, game demos make sales, at least if the game is any good. But it seems to me like the industry simply expects you to rent the game if you want a sample, or else pay the full price, which is likely one of the driving forces of game piracy. Obviously the whole "free of charge" thing is a major draw for pirates, but I can imagine I'm not the only person who buys games, but won't waste $20-$50 until I'm certain it's something I will get several hours out of.
"To confine our attention to terrestrial matters would be to limit the human spirit." -Stephen Hawking
Licensing. Simply put they can't afford the licensing for both the rights to streaming and rental in the same company. The rental will have access to more publishers. That's pretty much why they had to split it into two companies.
After the millions spent on the brand and trademark searching, not to mention the looming millions on re-branding, and that's the best hey can come up with?
Seriously, cover my bar tab for a nights and I'll give you 5 choices that rock and make way more sense.
Whoa -~! You nailed the timing on that bro! You are the world's first digital soothsayer. I read your post and went into hater mode, but dayum son you have this site pegged.
slashdot: where everyone yells sarcastic metaphors to themselves to understand the issue
because that's where they're headed.
This is like the Enterprise doing a saucer separation.
Netflix is separating themselves from the part of the business that they think are doomed. That way, when the DVD by mail business does go belly up, Netflix itself won't be around to take damage.
And I think they fully expect it to go belly up. Qwikster? Come on! "*ster" names went out of style almost 10 years ago!
Life is like a web application. Sometime you need cookies just to get by.
Did anyone else think that email started out sounding like a nigerian money scam?
NetFlix is also changing the name of their streaming service to The Pirate Bay increasing their streaming library 100fold!
I wonder if he made a one dollar bet with another CEO that he could ruin a successful company in one year and the other one could make a company successful in one year.
I love Jesus, except for his foreign policy.
So after pissing off a minority of users by changing the pricing struture the plan is to piss off the rest?
Force me to consider the disk and the streaming as unrelated things so that when I don't use one that much it'll be easier to ditch it?
I have to search for things in two places?
That whole recommendation thing they did a million dollar prize for not that long ago - it now can't use my DVD watching to recommend streaming?
Sure they are clearly planning to ditch the DVD half and re trying to limit damages from people ranting about it to a brand name that isn't netflix. But I doubt the people doing the complaining are going to oblige.
This whole scenario reminds me of what happens when someone falls in the water and realizes they are in over their head! They panic and begin to flail about instead of making calm decisions to get themselves out of trouble. If you're there with them, they'll try to hold on to you and end up dragging you down with them!
That's the only possible reason I can think of for this bonehead move.
SJW: Someone who has run out of real oppression, and has to fake it.
This sounds like they're starting to think about selling off or winding down the physical media side of the business.
It looks to me as if Netflix will next be looking for a buyer for Quiflix. First the separate the HQ, then totally separate pricing with no discount if you use both services, now the separate name. It looks Quikflix is being separated away from Netflix because Netflix will soon be selling the Quikflix business off to another entity.
if you cut a turd in two, what do you get?
Two turds, that's what.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
I received the same email this morning and immediately thought to myself that this was someone playing damage control, not someone with a plan and vision. I'm currently going through the process of finishing up a season of a television show I wanted to watch. And then I'll cancel both services. This whole Quikster thing rings of desperation, not a solid plan, almost as if they queried the fry guy at McDonalds and asked him what he would choose if he had to come up with something and then went with the first thing they heard. I don't think they realize that their customers are slowly pushing away from them, and that the damage has yet to be felt (it's going to occur during the next few months as the impact of the increase arrives and then the realization that Netflix is no longer the company it once was, as they pay two bills to get the same thing they used to get under one, even if it is the same price).
Sarbonn's blog: http://www.sarbonn.com/blog
Its interesting how mad everyone is getting. I dropped DVDs when the pricing changed because they weren't that big a deal to me so the existence of Qwickster doesn't affect me. I've put all my eggs in the streaming basket so I really hope they make good on their promise to get more streaming content available because of this course of action. If not and they crash and burn I'll have to go to Green Scene or Amazon Prime or something...
Neflix is gambling on how people will watch content in the future. Seriously, do you really think that five years from now the US will have improved its infrastructure enough to support universal access to downloadable content?
Time is what keeps everything from happening all at once.
From a financial standpoint, this sounds like the Netflix business of streaming is trying to prevent the DVD business side from bankrupting it.
Bryan
Does anyone else besides me thing that "Qwikster" sounds more like a streaming company name (I can get my movie QWIK instead of having to wait for the mail)? Besides, streaming is doomed to fail as long as ISPs are allowed to maintain bandwidth caps.
...has been a cool thing since forever.
Time is what keeps everything from happening all at once.
This ONLY makes any sense if they announce at the same time that they have made new agreements with all the studios to put all their catalog available for streaming.
That didn't happen, so now they are divorcing the service that actually *has* all the titles you want to watch from their primary brand and associating that brand with all the crappy titles you don't want to watch on streaming.
Corporate suicide -- how do they get all those apparently smart people to go along with this at once?
I'm not going to bash Netflix, but I will say that it's been a while since I've seen the complete destruction of a very well-regarded name brand.
Maybe the IBM PC?
Can you imagine Coca-Cola changing their name? McDonalds? Apple? Why work so hard to build name recognition for a service and then toss it in the garbage?
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
there goes Netflix. What made them useful to me was the low price compared to cable television. Take that away (by charging me $20/mo for two or three different services) and I'm out.
I guess people will pay just about anything for TV. Life sucks pretty bad unless your rich, so I can't blame them.
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
So we here in the Slashdot crowd are the first ones to laugh at businesses that fail to stay ahead of the technology curve. AOL and their endless CDs, RIM getting destroyed by iPhones and Android phones, Yahoo's failure to recognize that Google's advantage comes from more than just its search algorithms, et al. A common theme through all of these dramatic implosions is that the old business model strangled the new, and that the leadership of these companies was unwilling to take the short-term pain hit to prepare for the future. Yet Netflix is doing just that, and they meet with even more derision because it's going to screw up the existing customer base.
Do any of us believe that DVDs via USPS are the future of content delivery? Of course not. Could Netflix have spun it a little better? Sure, but there's a whole set of reasons that moving away from your established business model is considered painful, and one of those is that it's going to piss off the established base and cost you some lost business. A little more artistry in the transition would have been nice, but anyone who thinks that this move is going to kill off Netflix is probably mistaken. They are being remarkably honest about it all.
The DVD business is dying fast, and they know it. Direct content delivery is the growth industry that is disrupting DVDs (and eventually CDs, games, and packaged software) out of existence, and they're jumping to the new ship before the old one is sunk.
Software Shouldn't Suck
E-mail: frank at jacquette dot spamless com (remove the spamless!)
Until they stream in 1080p with full audio the online portion of the service is useless for me. I have a home theater with the big TV and big audio system so I can enjoy the whole movie. If I'm on a plane then streaming might make sense otherwise I want the physical disc quality.
I have been a member for about 6 years. My price has been going up slowly over that time for various reasons, but the recent jump due to streaming forced me to re-evaluate my monthly bill. To my surprise if I dropped streaming and blu-ray my monthly bill would almost be the same as when I first started (back before streaming or blu-ray).
That lead me to believe that their pricing has just been changed to reflect the cost of streaming, they took the initial approach of giving it away for free and now feel they have enough of a user base to start building a business. I can understand they are business and need to charge for the service they provide. So I reduced by DVD plan and kept the streaming plan so there was no monthly impact for me.
However, moving to two independent services is entirely different. As the email from the CEO stated by doing this they are breaking the integration between the DVD and Streaming services. As you stated it is now necessarily to manage both separately, meaning duplicated effort on two different websites. Not only does that waste the customers time it provides less incentive to use both systems. Integration is often what separates a good system from a great system, and that applies to many things we use in daily life and Netflix is no exception.
I can't believe that the Netflix team doesn't understand the value of integration, as much of their past work involved integrating both Steaming and DVD on the current website. I also know that the CEOs long term goal has always been online delivery (hence the name), so maybe this is that first step. But it sure doesn't feel like a step in the right direction, perhaps because the primary differentiator between Netflix and everyone else was the option for both streaming AND physical media in one service.
1. Build big movie rental company
2. Beat out competition and monopoly the market
3. ?????? (sell off your shares of the company just before changing its rates and services)
4. Profit.
this whole netflix debacle feels like a train wreck, and I can't pull my eyes away.
Wow...just wow. I was ok with the price hike, and figured I would deal with their horrible new interface they just rolled out. However, this appears to have finally pushed it too far. Are they determined to alienate their entire userbase? They lost a lot of mainstream content (Starz pulling all Sony films...and soon pulling completely out in February), made a horrible interface, made a 60% increase in price, and are now splitting the DVD service out (resulting in 2 websites and queues). Are the board going to do anything about this guy? He is driving the brand into the ground.
You don't need a psychic to see the writing on the wall, but they're in serious financial trouble if they are rebranding.
You hit the nail on the head with the IBM PC (at least the 2000's version of the story). Lots of people trashed IBM's sale of its PC unit to levono. But it turns out that IBM was just 5 years ahead of their competition in realizing that the margins on most PCs made them not worth dealing with. This is a reality that HP is finally coming to. DVDs are the same way. Five years from now, this may well look as forward looking as IBMs decision. Look for Netflix to sell off the DVD business in a year or less, and focus on online (regardless of what they say).
Also, look for the game disc rental business to implode in less than 2 years. This move by netflix will push publishers to rapidly move to more 1-time code / pay for extra content / etc business models. When that happens, the game rental by mail business will be nearly useless.
Now that you mention it, they once replaced Coca-Cola with a new formulation that was similar to Pepsi. They relegated the original to "Coca-Cola Classic". I'm not quite sure when they quit doing that.
The idea sounds stupid. The separation brings only a slight value to single service user and takes away alot of it for customers of both service. The better solution would be simply to redesign the website since it was designed with one service in mind. Simply show a dedicated data/interface based on the subscription the user has. If users still have both services, they can still have the benefit of the original website.
As for Netflix keeping streaming on the original website, that's an obvious choice. What do you think would happen to all those devices that support Netflix, many of which can not be updated easily? It would bring more hassle then it's worth. Putting the dvd service on another name however doesn't affect users much.
Having 2 bills also is a lose for customer of both service, while it's a win/lost for the company itself. Clearer separation of accounting (easier to deal with each service costs/profits as they really are completely different in those terms) at the cost of larger number of processing (especially those who pay with credit/debit cards).
Really? Qwikster? It's 2000 again? Apparently, this company will be around for about six months before fading into obscurity, like every other *ster brand. Bah.
Quick, stir!
HP is showing the world how to kill a successful company in under 2 years. Netflix is showing that they can top HP.
I8-D
It still blows my mind people complain so much about a 5$ price change.
5 FUCKING DOLLARS.
Let me first begin by saying, let's have some foresight here fellow Slashdot readers. If the DVD business has been increasingly difficult for Netflix to maintain, and considering when they did change the price plans, most people dropped the DVD package but kept the instant video. Why would you try to push a market that is doomed to fail especially with the rise of instant media players for the TV and applications for phones/tablets?
I would bet they have enough subscribers on their own right now to push this idea... considering they already have. I like how you all are trying to criticize a CEO for his business strategy but I think you should let their business speak for it first.. I think this is a good idea and only time will tell, I'm sorry if you're hurt that you'll have to go to another website for your DVD shipping service, but in all honesty, the DVD is dying market. Why should I ship myself a DVD if I can buy a media streamer where I can also rent or buy movies? (waiting for every angry technologist to tell me I'm wrong. meanwhile, not realizing that they're the minority in the market... especially the minority that's smart enough to pirate something if it really wants it)
This is how I look at it... you may have to sign up with two different webpages to have them hit your credit card but in return it's cheaper than having the combined Netflix instant/dvd package. ALSO, you're getting the option to combine a gamefly like service with a movie rental service. And, as the CEO said in the article, they'll be able to focus on using their capital for more movie licenses for the people (majority) who use Netflix for their streaming services.
Having said all this, Quixster is still a lame name.
Yeah, but at least they kept the brand name!
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Don't confuse "streaming" with "subscription". NF made it big over BB b/c they had an unlimited subscription plan on DVDs by mail. If they spin that off they have a subscription for streaming, but there are lots of other places now to get streaming - Hulu, Hulu +, Amazon Prime, VOD, Crackle, VuDu, game consoles, etc. Without having the combination for streaming and DVD unlimited subscription plans rolled into one they are left with subscription streaming, which requires more than just "web monkeys", it's requires broadband. The USPS may be a mess, but more people can subscribe to that than broadband.
What difference does it make whether someone watching X DVDs by mail and someone who watches Y movies by streaming? The only difference here is that you can just watch them when you want and in a much shorter time span. I don't understand why content providers would think that just because someone doesn't have to wait for a movie in the mail, that that somehow put more value on that??
Good insight - I hadn't thought about this as a means to exit the market.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I wish we could look at the Netflix numbers and conclusively say - look this is how many people will pay for content if it's at X price, and this is how many will think it's worth it at Y price. Unfortunately, because of the way they handled the transition, I think there is a noticeable percentage that left because they felt they were being treated poorly - not because of the pricing alone. I know that's the way I interpreted it when they raised the 1DVD plan pricing by $1 six months ago purely for marketing reasons when they introduced the streaming-only plan, rather than grandfathering in existing users.
I am disappointed to report that, even though I feel this is a bad business move, Netflix stock has been up by $4.31 ( 2.8% ). Looks like stock holders and investors lack common sense now a days.
So I go through spurts of using Netflix. I'll have DVDs lying around for 6 months, then will go through a 3 week spurt where I watch movies and immediately return them, get the next one, etc, until life gets in the way again and the discs lie around for another 6 months.
The reason I continue to pay Netflix (and don't deactivate my account) for 6 months, during which they make money from me for no cost, is that I have a long queue, I have a HUGE library of ratings that I've put a lot of though into and which now recommends some nice movies for me.
I also like being able to see which movies in my queue are available instantly to watch.
Now, here's a few questions I have:
1) Currently my queue is about 85 deep. Only about 10-15 or so of them are available for streaming. That means the streaming selection is very limited. Is that really a good future business model?
2) Will my ratings be jointly shared across both services? I've put a lot of effort into them (it's like building a collection, same mentality) and it's one of the reasons why Netflix has gotten a monthly fee from me for months without me using any of their services. Even when I watch a movie on cable or in the theater, I now have the habit of logging into Netflix just to update my rating of that movie.
3) Will I be able to maintain a single queue of what I'd like to watch and choose the best medium of streaming/DVD based on what's available?
Frankly, if I have to maintain 2 queues and 2 rating libraries, at least one service will fast lose a customer. Right now I'm paying for the joint streaming and DVD mailing option.
-"Those who fought today will die tommorow."-
Guys,
Streaming is the future and making Qwikster will make it easy to kill it of when dvd rental doesn't generate any profit anymore.
Simple as that.
Looks like ol' Reed has been watching too many tired old 80's teen movies. Guy (played by Reed) has to choose between two girls to take to the prom. Choices are either Reliable But Plain Longtime Friend (played by DVDs) or Sexy Hot New Chick in school (played by streaming). True to form, Guy goes for Sexy Hot New Chick. Unfortunately for Reed, he didn't sit thru the whole film to see the valuable life lesson Guy learned by not choosing Reliable But Plain Longtime Friend.
Quickster will go the way of Napster and Friendster...
By splitting the company they are able to bargain contracts differently for content and put a lot more emphasis on the two different businesses that were Netflix. The DVD service is just that, an online movie rental(now games too). The streaming service will now have the focus and ability to grow in more directions that would be a little to drastic for a former DVD service. I am gambling that they will end up with lot more content as a result of this split
Ah, you do realize you can pause your subscription, right?
A business lesson in how to ruin a company in just a few short months, from a CEO perspective.
This is my sig. There are many like it, but this one is mine.
http://blog.netflix.com/2011/09/explanation-and-some-reflections.html
The customers in the comment thread REALLY seem happy. Everyone is going to love two bills, two services, two everything. I cancelled today.
today is spelling optional day.
They don't want the the brand name. Not on the Discs. Discs are so 5 years ago. Just like AT&T doesn't want you to think of Telephones or Telegraphs. They want you to think of them in terms of a communication company.
"I like classic Coke better than new Coke!" Flashback to the 80's.
I love my sig.
Hi, I'm Flix McNetFlix, mascot and president of the NetFlix company, and I'm here to explain why the convenience of one media rental website [in your town] has been replaced by the convenience of two media rental websites.
You're probably thinking, "Sure, more media rental websites are great, and I don't mind paying the extra hidden fees, but how will I remember all those sites?"
Well, scientists have discovered that even monkeys can memorize two sites. Are you stupider than a monkey?
Oh Netflix. Don't they know that you should never split the party?
The CEO talks about needing to separate the two products in order to improve the Streaming side, which just seems like a lack of creativity on their part. They are dissolving an incredible, unmatched service, without any real concrete example of what exactly they're prevented from doing in terms of marketing or technology.
The differentiating factor of their streaming offering *is* the integration with a physical disc queue. Without that, there is nothing that makes their streaming service any different from the others. It seems like they are destroying the improved negotiation position they have with content providers over others like Hulu Plus. Any advantage they have with a larger library or better device integration will quickly disappear.
At least Wall Street likes it.
Say, is Blockbuster still around? :)
And I bet you that by this time next year, Netflix will insert commercials into the shows without being able to fast forward. And the price will be higher.
I see lots of people calling netflix stupid and laughing about the fact that they're dying. And maybe they have made some bad decisions, but last time I visited the USA, most of my friends there were very happy with them, so they clearly know how to please people.
But here's the question - if your raw materials costs rose by 5x from one financial year to the next, how would you handle it?
To compound the problem that you'd have, you've been running for quite a few years, and you've captured as much of the market as you're likely to in the short to medium term.
How would you go about keeping your company alive under these circumstances ?
Yeah, that's a good point. I hadn't considered that they are looking to discard the disk business altogether, and this is just a step towards that.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I wonder if Netflix' plan is to sell the streaming business to Amazon, or something like that? Amazon wouldn't touch Netflix in the past because Netflix had nexus everywhere, which would have forced Amazon to collect sales tax in every state.
With Netflix only holding cloud services, this makes it easier for them to get bought out. Or, the opposite might be true. Netflix could be planning to sell the DVD business to Redbox, which would certainly save money on postage.
Either way, I imagine there's more than meets the eye in this change.
They should reform their DVD and streaming business under a new heading of "Not-Getting-My-Money-Ster!" Because that's where their business is at right now!
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
Am I really the only person that welcomes this move? Sure, for now we're losing interactivity between DVDs and streaming, but in the long run this will give us better services. Already they're adding game support to Qwikster and it should only get better from then on. Maybe they'll even lower prices down the road for Qwikster due to not having to license anything or introduce more social features for each. They're not even close to killing off DVDs; that would be so stupid that it defies common sense. They're making a profit on it, so killing it off would only harm them. I for one welcome this change with open arms and, even though it might be a little rough at first, it will get better as time goes on. Besides, is there any comparably cheap alternative that supplies just about as much content in just as many places (Wii, 3DS, BluRay players, etc.)?
"Our country is not nearly so overrun with the bigoted as it is overrun with the broadminded." -Archbishop Fulton Sheen
The newly named service includes video games, so "flix" would be a bad choice.
Game, movie, what is difference?
That's probably what they want, trying to get people to move away from mail to the streaming service.
Except a lot of people who rely on discs by mail would have to do just that: move. There are still parts of the United States without cable or DSL, where single-digit GB per month capped satellite Internet is the norm.
What happened to Netflix? I think they must've hired some ex-blockbuster employees to take the company toward a "new direction". ... give me a @#$# choice!), took out friends options, then started fumbling with the price (although I could've handled that choice) and now they're just going to voluntarily pull the company apart, depriving customers of a comprehensive service. Time to look for alternatives (suggestions?). Sad. There was no reason to shoot yourself in the foot Neflix, really.
It was a great service - simple, useful, pleasant. Then they started dumbing things down, screwed up the streaming movie selection interface (all I see now are stupidly large icons of the movies that I've mostly seen, without a good way of finding anything I want to watch; I am sure this works for a 4yr old who likes to watch the same cartoons over and over again, but common
Unless they've got an ace in their sleeve and they can add an order of magnitude to the amount of content available for streaming, this is going to kill them. I'll probably end up quiting one or both. I understand the business side of it, but you don't sacrafice a great product to do stuff like this unless the CEO's looking to hit some bonus and get out.
"It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt."
--Mark Twain (Maybe)
From the email they sent out about it:
A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.
So, I think that's a "no" for your questions (2) and (3). I think that's the real disaster here. Too many people are concentrating on the dumb name, and overlooking the huge downgrade in convenience. If Netflix wants people to transition from DVD to streaming, it seems they've created a huge barrier to that by not sharing the ratings and viewing history between the sites. The strategy just makes no sense.
Stupidflix. Thats all I have to say
Wired Netflix Article
This sounds like a bu$ine$$ move, not a technical one. The DVD side HAS been profitable, and the net streaming side is coming under increased pressure to own up to (and pay for) their bandwith. So, to take the old conglomerate model from the 1990's, set them up as separate entities, so the loss on one side doesn't drag down the stock price of the other, and hope for a sell-off or merger to feed them into retirement. The folks holding the ownership stake (stock) in NetFlix get representative shares in each entity, and if the plan holds, either through buyout, merger, or just plain luck that BOTH are profitable, the two halves are worth far more than the original whole.
Can't add a movie from one search into the other queue? Of course not. They have to be completely separate, at least at first, or the SEC doesn't buy the "two separate" companies argument.
So by having two separate companies they can negotiate streaming rights without having to agree to harsh terms on their DVD side (30 day waiting period after a DVD goes on sale, higher prices, stripped down DVDs)
Why does Netflix have to negotiate with anyone but a retail partner for DVDs? What prevents Netflix from buying DVDs and renting them out? Do they need permission from the studios or other copyright holders?
I would sooner burn X dollars a month than fund Apple's shitty business practices. Same goes for Sony.
"Liechtenstein is the world's largest producer of sausage casings, potassium storage units, and false teeth."
The problem is that so sign all these streaming deals, Netflix had to agree to delay providing DVDs-by-mail of new releases. By decoupling the plans entirely, the DVD side (Qwickster) can start DVD-by-mail as soon as the DVD is released to the public.
And being in direct competition with Qwickster will help Netflix in negotiation. Netflix will be able to say "hey- we're competing with a company that has a large DVD-by-mail business. They absolutely never have to wait for new releases. And they pay you once for a DVD and lend it out forever, but we pay a recurring licensing fee." If media can't see the value in this and don't make deals, customers will move to Qwikster and the media companies will make less money. If they do see value in this, media will make deals with Netflix and customers will see more streaming content - and more quickly after movie release.
The DVD and streaming may seem like a synergy to customers - but for negotiating with big media, its actually the opposite. The problem Netflix has is that they really haven't dealt with the customers well over this issue. If they can smooth that over, it will mean more streaming content, less waiting for new releases, and, hopefully, holding the line more on pricing.
Netflix / Qwikster meet the shark. You've just jumped it.
"Liechtenstein is the world's largest producer of sausage casings, potassium storage units, and false teeth."
I was more than happy to drop my DVD service and drop to streaming only. My wife and I stream tons of stuff and for only $8 a month it payed for itself long ago. Guess it all just depends on what you like to watch. We could care less about all the new crap that comes out, as we love all the old TV series that Netflix has.
So it only makes sense if monkeys are flying out of Reed Hastings' butt?
This does seem like a strange plan, but one thought that occurred to me is that, probably, when the big content owners are negotiating about how much to charge for streaming (or deciding if they will even be available), the fact that their content is already available on Netflix via the DVD service makes it hard to force them. Imagine after this change, where if you have the streaming only service, even the recommendations don't show the DVD-only titles. Except for certain big titles that you search for, you will never know what you are missing, and those titles will drop off the radar. And if you are happy with the streaming-only titles, then what is your incentive to go with the separate DVD-by-mail service.
This may help the big content owners come to their senses and allow streaming, or even download rental. I think what we are seeing are the effects of the current and impending shakedowns by the content owners, who prefer to own the channel and thus the profit inherent in the channel.
This just sucks all around. I feel for Hastings. Netflix started to get big and the content companies, (scared of another iTunes), started to rachet up content prices. His response was to jack up consumer cost which reminded people they had netflix and promptly cancelled it.
That said, this solution is terrible. I have 2 disks + bluray + streaming. I honestly might have kept it. I like getting movies on bluray. I almost LIVE off of netflix movies. However, amazon prime is looking a LOT nicer now. I'd probably get hulu too if I didn't know that it would be putting money directly in the pockets of the people who screwed netflix. I don't want to reward them for their actions.
I do security
Comment removed based on user account deletion
The differentiating factor of their streaming offering *is* the integration with a physical disc queue.
Exactly. I don't doubt that In The Future, we'll all be watching movies and TV programs primarily via internet stream. I already do.
But Netflix needs to face reality about their current streaming offerings... I like Muay Thai boxing movies, sci-fi b-flicks, and 30-year-old TV series as much as the next guy (that is, I do, but a little goes a long way), but most people want to see something that's in the "Top 100" too (I do). Currently, Netflix streaming doesn't doesn't offer that, but Netflix streaming+DVD does... as does Amazon, iTunes, Hulu+, etc.
The only thing that would make this make sense is if Netflix, by divorcing their DVD delivery and streaming businesses, will get better selection and terms from movie studios and other content holders for their streaming service.
Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business.
Borders, maybe. But when was AOL ever great?!?! Unless it was the only possible way of getting onto the internet, AOL hands-down sucked compared to any of their peers or predecessors, namely Prodigy, CompuServe or Bubba's tin-can ISP. The only thing AOL ever did was support the CD production/duplication industry and the postal service.
If Netflix is using these two companies as a role model, they're already on the path to failure.
Am I the only one who thinks Netflix streaming is still a really, really good deal, and those unsubscribing are overreacting?
Because they are planning on royally screwing the DVD by mail service and don't want it to kill Netflix? Its no secret the USPS is going under, they are broke as a joke and getting ready to close branches left and right. Add to this the teabaggers that wouldn't allow a tax raise on the top 1% even if the bridges all collapsed and planes were falling out of the sky and you can see the writing on the wall. The only way to save the USPS will be to raise the holy hell out of prices.
Now as we saw even a small price increase when it comes to Netflix has people bailing in droves, so what is Netflix to do? Simple you spin off the losing model and keep the one that will remain profitable after our spineless president (I swear he makes Carter look like a tough leader) bends over for the teabaggers yet again.
Of course now that Blockbuster has been bought out and got that nice cash infusion they may be in trouble anyway on the streaming side, and with a Redbox on every corner their DVD by mail biz is DOA. Final prediction? Netflix gone in less than 3, 4 tops.
ACs don't waste your time replying, your posts are never seen by me.
Wall Street is a fickle mistress, and cares overmuch what other people are saying about you.
The initial bounce was probably due to their CEO saying something -- anything -- in response to the customer anger over the price hikes that have caused their stock price to go from ~300 to ~150 over the last three months. Now some 'analysts' are weighing in with much the same "Uhmmm, what?" that Netflix's customers are.
Before this whole price thing blew up, I gave up on Netflix. Why?
1. If I want anime (my favorite genre), I'm better off with http://www.rentanime.com./ It costs $20/month, but the selection is significantly better. I'd already seen pretty much all the good anime that was on Netflix anyway.
2. If I want TV shows, go damn near anywhere on the Internet these days and you'll hit a way to get TV shows. From Hulu+ to iTunes, to Amazon, they're everywhere. Pretty cheap, too.
3. For new movie DVD releases, there's http://www.redbox.com./ Sure, it's not quite as convenient as Netflix was, but I only watch 1-2 movies a month, so it's a *lot* cheaper. Plus it has the spur-of-the-moment factor...as long as I'm willing to put some pants on and drive 5 minutes, I can get the DVD right away.
About the only thing left is older movie DVD releases. You can get most of those on Amazon too.
Skip Franklin
It's always darkest just before it goes pitch black. -- despair.com
I'm cancelling my NetFlix account entirely. It's been one misstep after another, with NetFlix falling down the stairs and hitting their head on every step. Every move they've made recently seems designed to alienate me as a customer (and I've been a subscriber for many, many years.) The price changes, the web site makeover disaster, and now completely splitting the DVD and instant streaming, they've completely removed all the important features that made NetFlix so useful. It's now clear why they haven't reversed course on any of this...it's obviously been in the planning stages for a very long time and now that they've started, they can't stop. These weren't individual missteps, it was one giant leap off a building. They're forgetting that the product is video, and users don't really differentiate between DVD and streaming for consumption...I just want a service that provides ANY movie I want to watch, and I'll pick the delivery channel.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html.
After looking up the 17th Amendment, I have to say, Why? Are you advocating the Parliamentary system e.g. in the UK where the upper house is elected by the lower? Seeing as it removes power from the voting public, I'd be interested to know why...
And your second link has nothing to do with the first. Oookay...
Unity? Screw that: XFCE. Slashdot Beta? Screw that: SoylentNews. Australis? Screw that: Pale Moon. UX developers DIAF
A little golf clap for making the demise of Netflix's DVD business into a partisan political issue.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
I find it incredibly hard to believe someone, let alone head of the largest digital media distribution company, is this short-sighted. The whole "ouch!" reply literally made my jaw drop.
I'm kind of expecting a morning after message with a the simple explanation of how his keyboard should be taken away when he's drinking.
I'll hazard a guess at why this is. The "content providors", the movie and tv networks, want Netflix to pay per subscriber. Some subscribers never use streaming, so the separation was an attempt at moving some people off of streaming, so that Netflix could point at the streaming subscribers and say "See, this is how many there actually are."
Now, with the STARZ negotiations falling flat, I'd hazard another guess that STARZ insisted that Netflix pay for all subscribers, not just the streaming ones but the dvd only included. Why? Because that would mean Netflix would have to pay more, and the MAFIAA likes money. This step of separating them into separate businesses is pretty much the only step available to Netflix. Once they can say "See, these are the only customers we can negotiate for" then the content providers will have to either agree or raise their price.
I'm actually surprised that it took Netflix this long to separate the businesses. And the process of doing so may mean I keep my account open after the first month at the newer price.
I predict Quixter will get way more customers than Netflix. I hope this will be a clear message to the Netflix board to finally get rid of the clueless CEO (Hastings).
The reasons I don't, can't & wouldn't want to stream:
* Netflix (still) don't support streaming to Linux
* Streaming picture quality is significantly worse than DVD, let alone Blu-ray
* Transient net lags often pause or even kill streaming mid-movie (I know this from both my neighbors who stream netflix)
* Can't REW/FF with enough granularity (frame by frame)
* The next thing will be compulsory-watch advertising in the stream
Hastings recently stated there will definitely be no more price rises, but I find it VERY hard to believe that the monthly outlay for a Netflix account + a Quixter account will not be together more expensive than a single Netflix DVD+streaming account.
This seems twice as weird as the price hike earlier in the summer. "I messed up," says the CEO (FTA), but at the same he's going to double the mess-up by even further separating and ghettoizing the DVD customers, am I right? Seems not only tone-deaf, but more like a pathological liar. "Sorry that hurt, to make it up to you I'm fucking you in the ass twice as hard right now." Total doublespeak.
(I'm not a customer, sure it's just business, but seriously this statement makes my brain hurt.)
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
Mod parent up. This is my beef as well-- the way Netflix manages my queue and ratings is not ideal, but it's familiar and convenient. I liked that I could sometimes have a movie on my DVD queue that would move to my streaming queue when it became available-- it was like a little present. Now I have to toggle between websites? Major hassle. I guess I'll have to check out this "torrents" thing all the kids are talking about. Bummer.
If you have one customer and you create two products do you make them go to two different stores?
I just transcoded my DVD library (around a thousand). Some movies I'll probably never watch again and marked and kept them offline just in case. The others I searched netflix to see if they were available online so I didnt need to add them and save disk space also. While doing this I found very few of my favorites were actually available for streaming maybe 1 out 20. So I was surprised that so few are available. I cant believe my "taste' in movies would be that nerdly eclectic.
NOT available online for streaming 12 Monkeys,2010 Space Odessy,Any of the Alien movies,American Werewolf in London,Bladerunner,Brazil, etc.
SO if I was forced to have to pick streaming versus mail only... it would have to be mail only, because streaming is kinda thin. That Amazon premium offer starts to look better and better, My DVD player offers Netflix streaming and the XBOX 360 and WII both offer netflix streaming AND rearrange our Netflix by mail queue... that goes away if Cripster becomes fact and then all devices have to be reprogrammed. My wife just said she sure likes Netflix after they released streaming and mail order selection for her Android phone... We'll have to reevaluate now. And for the first time I will complain. Now to short my Netflix stock....
Dismal selection, high prices with no real sign of if they do raise prices any more gaining content, infact all indicators seem to point at losing content, No linux/BSD support. I think Torrenting may be better for my streaming movie requirements, And hey that works on my TV too netflix CEO!
The slashdot audience has named all the reasons why this is a stupid move in terms of customer service. SO why are they really doing it. I think the logical explanation is likely it positions them better with their suppliers.
I would bet that under the Unified Netflix model that Disney was saying "give us a cut of your Disk service or no more streaming movies for you". When they didn't pony up, Disney forced STARZ to pull the plug.
Basically, Disney or Sony or whomever could blackmail netflix. They can't control the DVDs since netflix buys those open market. But they can control who gets to stream. And thus they can blackmail netflix on one part of their bussiness
Now if they split it in two. No more black mail. yep they could decide to hurt the streaming company. But what could they gain from that. The streaming company won't have revenue from disks to pay the black mail.
Thus the split is a poison pill.
Some drink at the fountain of knowledge. Others just gargle.
Have you seen the Qwikster Twitter account? I think the profile picture explains the thinking behind the split. https://twitter.com/#!/qwikster
I'd subscribe to Netflix to watch that exclusive content...
Peter predicted that you would "deliberately forget" creation 2000 years ago...
companies manufacturing smoke machines and mirrors have reported increased sales and stock prices...
I thought the game publishers were already doing that to foil the used game market.
I have cancelled and returned numerous times, and they just keep your ratings around. My ratings are useless lately anyway. Since they put the new algorithm in, I get "You have rated 1028 movies! Please rate more movies to get suggestions." Huh?
Peter predicted that you would "deliberately forget" creation 2000 years ago...
Not me. Anyone who thought the streaming would be a free add on forever must have been locked in a bunker or something, and ignoring the shenanigans of the content providers. I predicted to friends/coworkers who have Netflix a year ago that streaming would eventually be a separate paid service. I didn't predict separate *companies*, though. Why not just separate divisions?
If I had to keep just one service, it would be a DVD all the way where I can get pretty much anything. I look at my queue, and maybe 5% or less is available on streaming. They were adding a lot for a while there, but then it all stalled out. Is it really time to make this split?
The biggest error here is having two independent web sites. That might make me go DVD only.
What baffles me is the folks dropping the DVD side. Really? I don't get that unless they supplement it with Amazon or Apple TV or some other pay per view service which I consider the true rip offs.
Can you imagine Coca-Cola changing their name?
Is Netflix the new New Coke?
I'd call Quikster Coca Cola Classic, then.
Discs are so 5 years ago.
They also have 100% selection. Is this the new hipster mode? Moving to the latest delivery system despite the fact that about 5% of the content is there, or you get ripped off with pay per view charges? Honestly, I looked into one service, and not only was it pay per view, but you had to watch it within a certain time period after paying. What the fuck is that shit? People sign up for that? Voluntarily? I'll stick with the physical discs until there's a digital service that has complete content without need for lube.
Why am I not amazed that someone could turn this into a political referendum?
Now who gets to shovel this mess up and dump it into the Obama tax plan thread?
I'm delighted by the rename to qwikster for prosaic reasons: my employer's proxy blocks all streaming content, so I can't manage my DVD queue from work. The new site will let me access my DVD queue again.
The Netflix streaming experience is pretty poor in my neighborhood. Lousy resolution, lots of delays, no subtitles for the hard of hearing. I don't see that improving in the near future. I'm happy to continue getting blu-rays in the mail.
As a Wii user, if they are offering video games on Netflix, now I don't have to pirate new games to play them whenever I want. That's a big bonus
Seriously, why else would they do it. It is going to be 2 seperate companies soon, they're getting rid of it. I just don't think they're that dumb as to kill the golden goose. They're trying to save a sinking ship. What do you do when you need to gain height in a balloon, you throw the extra weight overboard.
In my case dropping the DVD side made sense. I would often forget to return DVDs for long stretches of time. Streaming, on the other hand, was used frequently for kids shows for my daughter. Netflix was a streaming service with a few bonus DVDs for me.
Xavier Rabourdin for president 2012
The biggest puzzle is that this disarms Netflix of its biggest negotiating leverage against the studios for access to streaming content. Previously, if the studios tried to charge too much or negotiate far beyond the true value of their content, Netflix could just threaten to say: "no deal; we'll just buy your DVDs on retail market on the day you release them and immediately start renting them out". Nothing the studios can do to stop it and it hits the studios profits. And Netflix has indeed used this in the past, negotiating say a 30-60 day delay on renting out brand new release DVDs in exchange for access to streaming content.
Do not understand this move from Netflix/Quickster.
Fact is, even thou netflix only thinks it is only going to lose1 million of it's 25 million subscribers with the price increases last 12 months, meaning it actually is, or would have been INCREASING profits, sense the stock price took a 50% dive, the CEO is under huge need to make a change.
Does everyone see how retarded this is?
I know it's never going to happen, but we need to move back to a very long term only stock market investment rules view
Piss off your customers in a down economy. It's like printing money!
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
could be the end result of a years long movie industry conspiracy to kill independent video rental stores
They've got their head somewhere dark.
Weird that this and the "PETA porn" announcement came on the same day :-)
ron
Whitney Tilson in 2010
http://www.scribd.com/doc/45507715/Why-We-Re-Short-Netflix-T2-Partners-12-16-10
Background
We’ve lost a lot of money betting against Netflix, which is currently our largest bearish bet, in the form of both a short and put position. In this letter, we share our investment thesis in depth and describe why, at a stock price of $178.50 and a market cap of $9.3 billion (based on yesterday’s close), we think it’s an exceptional short idea.
http://seekingalpha.com/article/242653-netflix-ceo-reed-hastings-responds-to-whitney-tilson-cover-your-short-position-now
Hastings -
To wrap up, I have to agree with my friend Whitney that there are many risks ahead for Netflix, that our valuation is substantial, and that it is possible that one could make money shorting Netflix today. But shorting a market leading firm as it is driving a huge new market is a very gutsy call. On balance, I would rather have my co-philanthropists on the long side of this particular bet. Whitney: Short or long, I look forward to dinner and drinks together in the New Year.
I wonder if this move has more to do with the current problems at the U.S. Postal Service, and the possibility that Quikster (nee: Netflix) isn't going to be able to run their business off of some version of book/media rate, and may be paying actual market costs for their shipping. Book rates are supposed to be without ads, so I'm not sure they even get that rate, but if they had a special hybrid contract or agreement of that sort of rate, this could well be indemnification against changes at the USPS.
The original Netflix relies upon cheap, fast mailing. Cheap and/or fast are now in question at USPS. The streaming Netflix business relies upon unmetered internet, paid for by the customer. But most customers are starting to see broadband caps, concurrent with the rise of streaming video. In both cases, the business model depends upon trivial delivery costs to Netflix, with the bulk of the real costs defrayed to some third party or the customer. That is: Netflix itself pays a fraction of the full value of that premium speed delivery service. Faced with actual market rate transmission/shipping costs, Netflix could become a lot harder to run profitably. I suspect they're already starting to see some of those costs return to them in the mailing business.
But in the case of the breakup, "unlimited internet" is not threatened (or the caps are currently large enough), so the new Netflix still has a business model. In the case of Quikster, who may not even be able to use the USPS after the next shake up, things may have gotten a good deal more interesting. They may not be a sustainable business in the near future.
How much you wanna bet, after all disc customers have been diverted to Quikster, that the new announcement on Quikster will be a late fee system? After all, the email says:
There are no pricing changes (we’re done with that!).
But it doesn't mention the possibility of introducing fees and penalties, in addition to the pricing tiers.
Because that would be in line with the level of haplessly delivered bad news. Neflix has a PR problem like Darth Vader: We are altering the agreement, pray we don't alter it any further.
Unlike Lando, people can just go someplace else. When you can crush someone's throat with a thought, you have power, when you are Netflix, you have problems.
Name a SINGLE THING I said that was in ANY way false. Do you know who Grover Norquist is? If not you better learn, because he is the guy famous for saying "Get the government small enough you can drown it in the bathtub and he is currently the darling of the teabagger crowd.
You see he is going through the halls of Washington carrying this "No new taxes evar!" pledge and over 60% of the teabaggers have already signed up. Now since we all saw what happened to Bush SR when he did his "read my lips" and flip flopped those that sign his pledge will NEVER vote to raise a cent, it would be suicide.
Now considering the fact that Netflix DVD by mail business depends on a functioning postal service and that the USPS is closing hundreds of facilities just to survive another year YOU TELL ME, how is Netflix supposed to keep DVD by mail afloat? Are they gonna send them by carrier pigeon? Are they gonna hike their rates AGAIN to pay for the increases?
Because as I just told you and gave you a link for the ultra right is signing a "no new taxes evar!" pledge which means the USPS is fucked. So lets hear it, you tell me, how is Netflix supposed to work with their rates for deliveries increased and many post offices just gone all together?
ACs don't waste your time replying, your posts are never seen by me.
The USPS has been pretty much self-sufficient for the last 30 years. Taxes have nothing to do with the postal service, and your combative tone is not making me feel like you are someone who can participate in any kind of real discussion.
If you want to tone down the demonizing a bit, I'll be happy to discuss the relative merits of propping up the USPS with taxpayer funds just so it can maintain Saturday delivery and a gigantic pension fund.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Oh no, you just called a group of people a scary derogatory name, you win the argument. I don't even know what the argument was, but you sure won it alright!
P.S. The USPS doesn't use tax money to fund operations and hasn't for a good while now
Wonder what the public key field is for?
when i think of the usps, the first thing that comes to mind is not quick
I've had my account on hold, so I'm not dropping pennies
in the coffers. But since I'm not interested in streaming,
a service I was willing to allow to keep me as a statistic,
now loses me as such.
And I'm not going to bother with the "new" service. I will
try BlockBuster before rewarding Netflix for any of their
current business decisions.
-AI
For me, it is far better to grasp the Universe as it really is than to persist in delusion
Obviously from the users point of view this is a total PITA. The defense is that it makes business sense. Streaming is the future and DVD by mail is going to die. This my or may not be true, but its unlikely that netflix is going to dominate the streaming business in the future, and that's where they're making a big mistake by divesting the dvd business. This is because 1) Licensing costs. They lucked out with the Starz relicensing deal. It allowed them to get a bunch of content for well below it's economic value because back then Starz didn't realise its potential. The deal is due to expire in February at which point licensing costs will balloon (they already have actually, hence the rate hike). Moreover the content producers can quite simply refuse to license content and market their own platform. Compare this with the DVDs,- no licensing required other than buying the actual discs. 2) Barrier to entry. This is much lower with streaming, as you can tell with the number of competitors emerging (e.g. HBO). Ultimately the streaming platforms will become commoditized and the money will be made by the content producers. Which given his "apology" is quite gratifying.
A couple of days ago (of course) I signed up for both streaming and DVD delivery via Netflix. Will my subscriptions for both be continued with the respective companies be continued in the appropriate one (i.e., will my DVD service automatically move over from Netflix to Qwikster)?
Totally agree. Not a word from the CEO about how much they're investing in new streaming content or new deals with content providers. If Netflix can't come up with a significantly better offering on the streaming side, they will be handed their walking paper by the likes of Amazon.
It is a bone-headed decision from the customer perspective. No going concern would completely disregard the preferences of their client base in this manner unless there was something more compelling, such as the cost side. From CNN Money in July: "Pachter predicts Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012." (http://money.cnn.com/2011/07/08/technology/netflix_starz_contract/index.htm).
Netflix is looking at a 10 fold increase in their licensing costs. They can't pass that on to their customers, the demand side is too price sensitive. Their former corporate structure probably restricted their ability to negotiate these fees because they couldn't differentiate the user bases, streaming from physical. The key difference with this change is that this is the only way to separate the client bases into two separate companies.
Their setting themselves up for the 2012 negotiations with the content providers. This gives the two companies additional leverage and could potentially save them $1 billion (give or take a few hundred million dollars) in the process. In the long run, it probably is the best way to serve their customers, and their shareholders.
In all things moderation.
It doesn't matter. As soon as they decided to split the two services and charge for them independently, in my opinion, I think they lost their edge. People will shop around because they wont be as competitive. In addition to, I heard somewhere that they had lost their contract to some media provider meaning that they will loose about 1000 additional titles a month.
Wow. I think we all see that Netflix effectively has end stage terminal cancer here.
To me the lack of communication between websites even more stupid than that. Having gone "plaid" just does not do it here.
I don't have a Facebook account, but that damned website is integrated *everywhere*. I have to use Skype for business and it nags the crap out of me for Facebook. So do a lot of other websites.
Two bills? You're fucking with me right? Does your ISP give you three different bills for Internet, TV, and Phone? No. One itemized bill. Fine, they are really making two completely different companies and it has to billed as such. Fine. Probably a bunch of lawyers and accountants told them that.
Are you telling me that all the developers between the two websites could *not* figure out how to allow you to link your Netflix account with your Qwikster account? It would be as simple as a couple of API calls between websites. I do it all the time with our projects and clients. You might be on a single website, but it is making calls back and forth between multiple companies to get all the information you want. Facebook and YouTube can do it. You can be on my website, provide me with the credentials for YouTube, and from my website I can manage your channel, upload videos, remove videos, etc.
Integration is still possible here, even with two wholly different companies. You figure they would want to keep that straight out the gate.
There is no excuse for this. I absolutely know that the the CTO and the development team over there must have been in a state of shock listening to the stream of retarded bullshit coming from this CEO's mouth the last couple of weeks. You want us to do what? Ummm okay..... wait.... no integration? That really is not a great idea... We can do this you know right? Still no on the integration huh?
I refuse to believe that anybody on the IT side of things over there was going along with this singing a happy tune. More likely, they were quietly polishing up their resumes and getting ready to find jobs elsewhere.
*sigh*
I knew Netflix was going to die, but that was only because nobody else wanted it to live. It was basically terrorism from Big Content and its many bitches out there. You don't fuck with the lucrative rental revenue of the Cable Providers and Big Content, which in some cases are the same content, and expect no resistance. Especially, when those same companies have to absorb the impact of all of Netflix's streaming on their revenue as an ISP. It tickles me ohhh so much to know how much that messes with their oversell. Oh sooooo much. Same thing. Netflix poked the bear, and it seems finally the bear figured out a way to fight back.
Going to cancel the DVD service for sure. I have no patience for it. Spending 20 minutes looking around and adding shit to queues is all fine, but when I cannot add it to my Instant Watch queue when it is available instead of waiting for it.... that just is too stupid to participate in. My time is way too valuable to be having to different websites up on two different screens and cross referencing the shit between them with cut and paste. I would be the *best* at it too. Somebody like myself could operate very fast, because I do it in my job all fucking day long.
I don't want Netflix and Qwickster to be a job . The whole point is to provide me with some relief and enjoyment. Hence, why Angry Birds is damned addictive. It's easy. They are no longer easy, even for somebody like me.
Besides, it basically is about 7-8 Redbox rentals per month. Guess I will be using Redbox a lot more now.
I will stay with the streaming as long as it under $20 and still offers some decent content. Other than that, Netflix, you were great while you lasted.
R.I.P.
I can't believe that the Netflix team doesn't understand the value of integration, as much of their past work involved integrating both Steaming and DVD on the current website. I also know that the CEOs long term goal has always been online delivery (hence the name), so maybe this is that first step. But it sure doesn't feel like a step in the right direction, perhaps because the primary differentiator between Netflix and everyone else was the option for both streaming AND physical media in one service.
See, you're going about this the wrong way. Integration only makes sense when the business is slated to stick around for a long time. The way this spin-off is being handled reeks of purposeful brand destruction. Netflix has, over the course of the past 3 years, performed every step necessary to get rid of the DVD business. Whether the pricing was too volatile, the losses from missing/stolen DVDs were too great, or the margin was too low; it was clear the current management believed that the DVD business was doomed to fail.
At this point, Netflix's customers are stuck with the worst scenario: a DVD business soon to be destroyed (either deliberately or otherwise), and a streaming business that has a poor selection at best.