This iconic red envelope just became an endangered species
Netflix, it’s like we hardly know you any more. In a few short months, you’ve gone from beloved to baffling in the eyes of millions of consumers, and today’s news isn’t likely to change that.
Netflix CEO Reed Hastings has announced that Netflix is converting its DVD-by-mail business into a separate entity called Qwikster, leaving Netflix strictly as a streaming provider. Qwikster will also offer video game rentals alongside the traditional DVDs and Blu-rays.
Hastings’ blog post was apologetic to Netflix subscribers, beginning with the words “I messed up. I owe everyone an explanation.” Hastings then went on to describe how he felt that the company had mishandled the splitting of its DVD and streaming plans and the accompanying price changes.
From Hastings’ post:
“…I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.”
Hastings also claims that Netflix is done with price increases, something that has been a very sensitive topic for thousands of current and former customers.
Is it a wise move to spin off and rebrand the service that made your name famous? The Qwikster website, when it launches in a few weeks, will be completely separate from the Netflix one, making things rather inconvenient for subscribers who will continue to use both companies’ services.
Is this a forward thinking thing for Netflix to do, or is this latest news another indicator that the company has lost its way? Is the spinoff and rebrand of the DVD side of things a precursor to unloading that business altogether?
(via Engadget)
Reed excels at ripping up the playbook and starting anew. Forward thinking probably even with the socialist twist.
It looks like Qwikster is heading for the dumpster. ;)
Maybe the spin-out is a precursor to selling Qwikster to either Dish or even redbox?
I could see a Quikste/Redbox merger. Redbox would be able to do something with their old inventory.
what a stupid thing for netflix to do. Though at one point in his blog he makes it sound like they are making the spit so people understand the fee increase better. Way to talk down to your customers.
As one analyst put it today “Netflix has officially sent its dvd business off to die”.
Everyone be sure to check out the @Qwikster twitter page! Its hilarious.
Netflix seems determined to ruin its success. I just joined a couple of months previous, then the price split. So I dumped DVDs, since the streaming is great! The DVD return cycle was SO damn fast, but I can do RedBox, though your selection sucks compared to Netflix. But then throw out their brand name recognition for a nonsense name? At least keep it similar, like Discflix or at least Quikflix, if they’re so interested in giving a ‘quick’ moniker. Weird. At least they didn’t pick Blockbuster!
I can’t speak for everyone else but when I decide I want to watch something, I don’t want to wait 3-5 days (which I had to do [since I live on a rural mail route] when I tried a ‘free trial’ of Netflix a couple years ago). With the cost of physical media dropping, Blu-ray Discs can be owned for as low as $5 and DVDs much lower, I just buy my movies and for those rare instances that I want to see something new I just rent from Redbox.
So, with that said – how did they come up with the name “Qwikster”?
Headline…
Netflix half-halfheartedly apologizes for screwing up, proceeds to immediately screw up again…
Yep, that pretty much sums it up.
They’re prepping Qwikster for sale. Stupid move, IMO, as I liked the streaming/DVD combo (before the increase), as I’m sure others did.
I think with all the postal problems coming up, Netflix wants to get out of the dvd delivery business. So this split is the first step. It won’t be long before Quickster (which they should have named Kwickflix) folds, and they only have the much more profitable streaming business.
I got the email and thought it was rude. Despite his apology it didnt seem he really got what upset people. I had put my account in vacation mode at the begining of September. After discussing it with my family, no one has missed the Netflicks account. We had made the decision to just cancel it all together.
I don’t know what the apology was for, this was the plan all along. I also don’t believe that Netflix is done with price increases, simply because the studios aren’t done with price increases.
New subscriber growth was heavily tilted towards streaming-only plans so the split was inevitable. They’ll eventually close some distribution centers simply because the numbers won’t justify having so many. Long-term DVD will be such a small part of the business that it isn’t worth having the Netflix name associated with it.
Video game rental should have happened long ago.
The Netflix e-mail is simply spin. Netflix lost more subscribers than they had previously calculated they would under the new pricing so they decided to jettison the DVD business into a separate unit so that: 1)Wall Street valuation of the streaming-only company will not be hampered by poor results in the DVD operation. 2)The Netflix brand will now be associated with streaming-only; that they gave a ridiculous name to the DVD operation shows that they don’t think too highly of it otherwise they would have spent more time thinking of a better brand name.
I am not a fan of streaming as I think the selection of titles is too limited. But there are plenty of people who do like it and see it as a good value. Compared to other forms of entertainment, it’s not that expensive. The problems that Netflix will face is dealing with content-providers who want to enter streaming for themselves or who see Netflix as a cannibalizer of their other means of distribution; the providers will be increasingly reluctant to deal with them, thus making Netflix have to pay more for content.
The DVD-only operation is rife with problems. Their inventory is old and the likelihood of customers receiving bad discs continues to increase; this situation is not likely to improve given Netflix’s announcement of no further price increases. The Post Office is in severe financial trouble and it’s only a matter a time before they drop Saturday delivery, which will lower “Qwickster’s” value proposition to their customers. “Qwickster” will still hampered by a 28-day delay of new title releases.
Back in the day, Netflix was famous for having a high satisfaction rate among its customers. Those days are ended.
Qwikster + RedBox FTW.
RedBox gets access to a huge library and Qwikster gets to chop it’s delivery costs by delivering through RedBox kiosks. Subscription or a-la-carte I think this improves the bottom line for both companies and their users.
Well I hung on for 1 month post pricing increase, but if I have to go to two seperate websites to handle the dvd and streaming, just forget it. Going to try out Blockbuster’s mail service they don’t upcharge for Blu Ray or video games at least.
I just did that same thing and i’m impressed with it i get the new releases i want faster then netflix was so they have a bigger inventory. the turnaround time to get a dvd is same as netflix and if you still have a store close to you the return in store for a free rental is great to. never thought i would say this but i’m impressed by blockbuster’s by mail program.
Highly helpful thanks, I reckon your subscribers could very well want more information like that maintain the good content.
This goes right back to what I was saying when they announced the price increase and plan seperation. With all the high costs of streaming, they want to shed the DVD-Only using people so they don’t have to pay for them to stream if they don’t use it. I think they will also help them get rid of the DVD business by selling it eventually. I just found out that Netflix now has a Android app that supports alot more devices and have been able to stream a movie quickly and decent quality, so I am very impressed. I plan on sticking to Directv, Redbox, Amazon and Netflix as my lowest costing ways to get my content!
I had a dream Flex
Were did my last post go?
Are u deleteing ones u don’t like?
Like this one.
Only complaint I have is Netflix streaming needs new releases faster
B-movie Central
WOW THIS IS THE FIRST TIME I HEARD THAT NETFLIX IS DOING THE SPLIT…WELL I LIKE THE CONVENIENCE OF SELECTING THE MOVIES I WANT AND HAVING THEM SENT IN A DAY OR 2, BUT I DON’T KNOW ABOUT ALL THE EXTRA NETFLIX IS PUTTING IN PLACE, U MIGHT JUST HAVE TO START USING REDBOX MORE AND PURCHASING MORE DVD : (