Netflix splits in 2: Netflix for Streaming, Quikster for DVDs and Games

[Pyroph]

https://www.screened.com/news/netflix-splits-itself-in-two-dvd-by-mail-service-renamed-qwikster-adds-games/2898/

Seems like the reaction to the price changes was pretty strong.

[Chino]

They better hopes this works seeing as their stock closed at $155 last week. It was at $304 in July.

[glaurung]

Didn't see that one coming. 

[Sigz]

So what's the price for Netflix going to be now? Cause really all I'm interested in is the streaming, and I just might subscribe if it's a good price.

[yorost]

Name change doesn't change the recent price change in any way, it just means you have to have separate accounts for each service.  If you ask me, this just makes the whole thing even less appealing.

How is this supposed to help?  We dropped service because we didn't see it as being worth it anymore.  Are people supposed to see a new name and just come back?  I guess the gaming addition is nice, but that is extra just to be able to get games.

Sorry Netflix, the best thing about you was the mix of mail and streaming at one lower rate.

[CrimsonSunrise]

So....having an account with both streaming and mailing I wonder if I have to sign up with the new company or I'll automatically be signed up and billed?? 

[El Barto]

I suppose they desperately want to lead in the video streaming market, and don't want the mail-order side to drag them down.  The DVD's by mail was a losing business for them, and I doubt they care if Quickster survives or not.  I figure Quickster will tank, and Netflix will survive in the streaming market, but not with the force they had.  They've lost a great deal of their luster in the last six months.

Strangely, now that they've added games, I would have considered signing up again if they hadn't gone and made a mess of the whole thing.

[CrimsonSunrise]

I don't see how streaming, in it's present form can survive.  There just isn't enough of a library available streaming.  My understanding is that it is a very slow process getting the rights to stream a production?

[Pyroph]

So what's the price for Netflix going to be now? Cause really all I'm interested in is the streaming, and I just might subscribe if it's a good price.

7.99 a month for unlimited streaming starting September 22. I changed my plan from 1 DVD/Streaming to that, now that combo is separate; 7.99 each. It used to be around $9-10 a month for both IIRC.

Adding games for them could provide good competition for Gamefly, I've never used it though but I hear they're slow on delivering new games. However, I think that Redbox is going to have them beat for the sheer ease/accessibility and price.

[El Barto]

I don't see how streaming, in it's present form can survive.  There just isn't enough of a library available streaming.  My understanding is that it is a very slow process getting the rights to stream a production?

That'll change, though.  The same way the rights to rent VHS tapes did.  You're old enough to remember when it took nearly a year to see tapes in the local shop, and purchasing them cost $75.  As it becomes the established method for distributing to the home video market, it'll become a viable model. 

My concern is one of the pitfalls of capitalism, which is the various companies banding together.  We're seeing that with broadcast networks and cable companies already.  If Paramount will only stream through Viacom related outlets, Disney through their own outlets (ie Hulu), etc.  then it's going to turn into quite the clusterfuck.

[Pyroph]

Starz is also leaving Netflix next year and canceling their contract.

[yorost]

For everyone that leaves they free up money for different content, though.  They can't afford everything right now, so losing someone still isn't that bad.

[Ultimetalhead]

Netflix is so fucked. They're desperately trying to get people back. The letter from the CEO is just embarrassing.

[Gadough]

I got that email today and as I was reading it, I thought it was a joke. Or at least very tongue-in-cheek.

[Ultimetalhead]

I got that email today and as I was reading it, I thought it was a joke. Or at least very tongue-in-cheek.

It's bad either way. If he's joking, he's belittling the customers for not accepting the changes (And the customer is always right). If he's serious, that's a level of desperation I haven't seen from any CEO (except Collin).

[El Barto]

The customer is not always right, but that's a different story altogether.

I just watched the video, and he said that video games would be an extra charge, like Bluray.  WTF?  I didn't know they charged extra for that.  Is it an extra subscription, or a per disk charge, or what?  Honestly,  I'm really glad I jumped ship 2 years ago.  Whole thing's starting to look pretty whacked out.

[Jamesman42]

Streaming could be so good, why Netflix, WHY?!

[chknptpie]

I cancelled last month and haven't heard from netflix since. Have no thoughts about getting it again.

[ReaPsTA]

I'm going to assume that the people who run Netflix aren't idiots.  If that is true, then Netflix's only logical motivation for their actions is a purposeful effort to marginalize and ultimately sabotage their DVD business into extinction.

Given this - my question is why?  Does the DVD business really lose money for them?  If so, then why did they increase the prices without saying this publicly.  One of my least favorite pieces of business bullshit talk is when CEO's/managers/etc. say "we're increasing the price so we can do it better."  Maybe I'm wrong, but I doubt anything about Netflix (Qwikster's) DVD service will be better.

Another huge problem for Netflix is how stupid this is making them look.  They lost a million customers.  Let me repeat this:  THEY LOST A MILLION FUCKING CUSTOMERS HOLY GODDAMN SHIT!!!  To put those numbers in perspective, let's say each of those customers only paid for streaming service, which is eight dollars per month.  This means they're losing 8 million dollars in gross revenue per month, and 96 million per year.  And the value of their stock has been cut in half.  HALF!

If Netflix is willing to lose this much money to become a streaming only company without just saying "hey, we don't want to mail DVD's anymore," maybe they are stupid.

What I want to understand is what they're seeing that I'm not.  Even if it makes no sense, something is making them follow this course.  No business willingly decides to hurt itself so drastically for no good reason.

[Fiery Winds]

I'm going to assume that the people who run Netflix aren't idiots.  If that is true, then Netflix's only logical motivation for their actions is a purposeful effort to marginalize and ultimately sabotage their DVD business into extinction.

Given this - my question is why?  Does the DVD business really lose money for them?  If so, then why did they increase the prices without saying this publicly.  One of my least favorite pieces of business bullshit talk is when CEO's/managers/etc. say "we're increasing the price so we can do it better."  Maybe I'm wrong, but I doubt anything about Netflix (Qwikster's) DVD service will be better.

Another huge problem for Netflix is how stupid this is making them look.  They lost a million customers.  Let me repeat this:  THEY LOST A MILLION FUCKING CUSTOMERS HOLY GODDAMN SHIT!!!  To put those numbers in perspective, let's say each of those customers only paid for streaming service, which is eight dollars per month.  This means they're losing 8 million dollars in gross revenue per month, and 96 million per year.  And the value of their stock has been cut in half.  HALF!

If Netflix is willing to lose this much money to become a streaming only company without just saying "hey, we don't want to mail DVD's anymore," maybe they are stupid.

What I want to understand is what they're seeing that I'm not.  Even if it makes no sense, something is making them follow this course.  No business willingly decides to hurt itself so drastically for no good reason.

I don't think they're idiots either, but I think they gambled on the future of the streaming/dvd market and lost and are now trying to reorganize things.  Here are just a couple of the gambles they made:

1:  More studios would join the streaming market
2:  Streaming would overshadow DVD by mail
 
They have had a huge problem with getting studio support for streaming.  They've either dropped off, gone to other other services, or been too expensive for Netlix to sign them.  That's led to more people keeping the DVD by mail option which is much more expensive to maintain than their streaming service.  It's a vicious cycle that Netflix needed to get out of.  I think they're trying to save the brand by sticking to streaming and letting Quikster die a slow death as the DVD by mail service goes the way of the video rental store.

[ReaPsTA]

I don't think they're idiots either, but I think they gambled on the future of the streaming/dvd market and lost and are now trying to reorganize things.  Here are just a couple of the gambles they made:

1:  More studios would join the streaming market
2:  Streaming would overshadow DVD by mail
 
They have had a huge problem with getting studio support for streaming.  They've either dropped off, gone to other other services, or been too expensive for Netlix to sign them.  That's led to more people keeping the DVD by mail option which is much more expensive to maintain than their streaming service.  It's a vicious cycle that Netflix needed to get out of.  I think they're trying to save the brand by sticking to streaming and letting Quikster die a slow death as the DVD by mail service goes the way of the video rental store.

I liked/agreed with that whole post.  But I need to add something.  All of Netflix's current problems stem from a fundamental miscalculation that I could have told them about as someone who reads Hollywood and tech blogs - The movie and TV studios are not ready for streaming yet.  Even though they were making Hulu and signing more rights over to Netflix, it was very grudgingly.  They weren't embracing the format.  Counting on them to do so was a foolish risk.

There's something to be said for pioneering, but Netflix is dependent on one of the most inflexible industries in the history of human civilization for its content.  Given that actuality, you can't try to push them into seeing things you way.  As they're finding out, Hollywood is burning them.

EDITS: What the Netflix apology letter should have said

Biggest thing I was feeling but couldn't articulate -  Quikster is an intentionally stupid name designed to embarrass people into not using it.

Also, I'm getting really tired of Netflix's generally customer unfriendly attitude as of late.  In the instant queue, there used to be two lists - one of titles you queued for streaming and one of titles you queued but aren't currently available due to rights issues.  They just removed the second list.

What benefit is it to them to do this?  All it does is annoy the customer.

I think every business should have as its primary mantra "does this benefit the customer?"  If a potential decision doesn't benefit the customer, they shouldn't do it.  It's not like Netflix is losing hundreds of millions of dollars while Zappos is quietly one of the most successful companies in America.

Oh wait, that's exactly what's happening.

[yorost]

Streaming could be so good, why Netflix, WHY?!

Not you, too.    They aren't the ones who haven't embraced streaming.

[MetalMike06]

Wow, this is quite messy. I recently kept the Streaming/1 DVD thing and just accepted the price raise, and am fine with it. This is silly though.

[7StringedBeast]

Netflix doesn't understand that bandwidth is a problem with their streaming.  The internet infrastructure is not in place to be able to support everyone streaming HD video at the same time.  Sometimes you want a physical disk to ensure the highest quality viewing.  The fact that CDs are still around is testament to this.  DVds and Blu Ray are not going to just die off.  They assume everyone has computers and high speed internet capable of streaming their content.  The fact is, some people want to get a DVD to put in their DVD players attached to their home entertainment system.

[chknptpie]

I thought CDs were still around because people love Album Art and the booklets.

[Tick]

I had 2 at a time for a few years, but then steaming became available and I went to 1 at a time with the steaming picking up the slack.
I want both but when the price rose 60% I said, at 8 bucks a pop I don't want either so I ditched the whole thing 3 weeks ago, and I don't miss it a bit.
They really did screw themselves with the way they handled the whole thing and I'm done with it unless everything becomes available to stream at a decent price. Then I would come back.