Netflix Splitting in Two

Seems like a natural development. With the increased licensing fees for studio content it was affecting their streaming content. Hope this takes care of that.
 
Too many changes in too short a time, and none of them can exactly be seen as positive from the consumer side. I think they're just going to end up scaring more people off.
 
Hate it. And I think it's a poor business decision too. When people think movies, you want them to think "Netflix". Now they are qwikster and Netflix along with redbox and hundreds of other movie services (amazon, apple, etc included). Really, this move is just putting them in a bad position.
 
What annoys me about this is that you now need to manage two different DVD queues. There is no communication between the sites about what movies you have seen and what movies you want to see. It just seems like a big step backwards.
 
I just cancelled my DVD plan. Will use "Mom & Pop" video stores to rent physical media (which is not going away any time soon). I will keep Netflix and give them a chance with their streaming library, but if there aren't any big additions after the beginning of next year, I'll cancel that too.
 
It sure seems like they are trying to dig themselves into deeper hole. Great way to ruin a once great company, they're doing a good job of running people off and I bet the number of people cancelling their memberships shows this.
 
Stock hit a new 52 week low today. Their market cap has been cut in half in the past 2 months. All time high was just shy of $300 a share back in July, now they're at $130.
 
This.

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Question, what are Netflix supposed to do when companies like Starz choose to up their licensing fees from 300 million to ten times that for the same content?
 
That cartoon isn't exactly accurate. Disc rentals and streaming are not the same as the bread and the filling of a sandwich -- plenty of people do one and not (nearly as much of) the other.

I think I'm probably in the minority, though, in that I watch far more Blu-rays than I do streaming. (Selection is considerably better, as is the quality.)
 
David Jimerson said:
I think I'm probably in the minority, though, in that I watch far more Blu-rays than I do streaming. (Selection is considerably better, as is the quality.)
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I don't think you are, David. I much prefer Blu-rays for good movies, but for TV shows and lower-budget films, streaming is fine. The vast majority of what I watched on Netflix streaming is TV/Documentaries with the occasional old film thrown in (The Sting was was the last movie I watched on Netflix streaming). I have a fast Internet connection so quality is roughly DVD, but nothing beats a good re-master of an old classic on Blu-ray.
 
David Jimerson said:
I think I'm probably in the minority, though, in that I watch far more Blu-rays than I do streaming. (Selection is considerably better, as is the quality.)
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Agreed. the Family Callaghan goes through a minimum of 20 blu-rays /month. In fact, I had my satellite canceled, so for $25 bucks a month (new Netflix price), I'm still saving over $60.

This quikster stuff will be something of a pain in the ass. Because they'll now be on two different queues (on two different sites); I'll have to keep an even closer eye on what's upcoming on instant...to make sure it isn't also on my mail queue.

But-
As long as the prices don't go up again, I'll still be a (slightly agitated) happy camper.
 
Netflix wants to continue to show its shareholders a profit. DVD delivery is an expensive method of getting content to the customer. If you believe what data peddlers are selling, then you should buy into the notion that streaming quality and download times will continue to improve until beyond HD quality is available in real-time.

If licensing fees are becoming a problem, then the company needs to leverage its market-share against the distributors. Battles over content fees are being waged on cable and satellite providers as well and it's a high-stakes game. The reality for home video is that brick-and-mortar video rental outlets are becoming more scarce every day - giving way to online / direct mail and the growing share of kiosk outlets. Kiosks may be growing, but they cannot carry the vast selection that a traditional store or online merchant could. Certainly, for first-release business, they could become a very dominant player.

I've subscribed to Netflix for a long decade and I've gone to streaming-only this week. When we started in 1999, we paid less than $10 for three movies out at a given time. When they ratcheted our rates over the next couple of years - even abandoning a promised "grandfather rate for legacy customers" - we stayed. What were the options? Blockbuster? Everyone knew Walmart and Blockbuster were doomed out of the gate.

Though I watch Hulu and others, I really prefer to have less than 10 billing providers for my content. That's why I continue to shovel money to DirecTV / Time Warner for their services. My feeling is that most consumers would prefer less hassle in retrieving content. Netflix is the best, but they've proven that they too can be really, astonishingly out-of-touch with their customers.
 
Erik Olson said:
Netflix wants to continue to show its shareholders a profit. DVD delivery is an expensive method of getting content to the customer. If you believe what data peddlers are selling, then you should buy into the notion that streaming quality and download times will continue to improve until beyond HD quality is available in real-time.

If licensing fees are becoming a problem, then the company needs to leverage its market-share against the distributors. Battles over content fees are being waged on cable and satellite providers as well and it's a high-stakes game. The reality for home video is that brick-and-mortar video rental outlets are becoming more scarce every day - giving way to online / direct mail and the growing share of kiosk outlets. Kiosks may be growing, but they cannot carry the vast selection that a traditional store or online merchant could. Certainly, for first-release business, they could become a very dominant player.

I've subscribed to Netflix for a long decade and I've gone to streaming-only this week. When we started in 1999, we paid less than $10 for three movies out at a given time. When they ratcheted our rates over the next couple of years - even abandoning a promised "grandfather rate for legacy customers" - we stayed. What were the options? Blockbuster? Everyone knew Walmart and Blockbuster were doomed out of the gate.

Though I watch Hulu and others, I really prefer to have less than 10 billing providers for my content. That's why I continue to shovel money to DirecTV / Time Warner for their services. My feeling is that most consumers would prefer less hassle in retrieving content. Netflix is the best, but they've proven that they too can be really, astonishingly out-of-touch with their customers.
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Very well said, sir.
 
Isaac_Brody said:
Question, what are Netflix supposed to do when companies like Starz choose to up their licensing fees from 300 million to ten times that for the same content?
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Probably what they're doing now--lose business and piss off their client base. I don't pay Starz directly for anything, though. Just because I know Netflix is between a rock and a hard place, it doesn't make me a satisfied customer.
 
For better or worse, DVD by mail is on the way out. Since streaming media is likely the future - both technologically and economically - Netflix's old service is on the way out. Qwikster is set up to fail, and once it does the Netflix brand will still be in tact while Qwikster (and their DVDs) quietly fades away.
 
Taylor Rudd said:
For better or worse, DVD by mail is on the way out. Since streaming media is likely the future - both technologically and economically - Netflix's old service is on the way out. Qwikster is set up to fail, and once it does the Netflix brand will still be in tact while Qwikster (and their DVDs) quietly fades away.
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This sounds like what is actually happening here.
 
I am having a lot of problems with Netflx streaming. It does not play on my Mac Pro anymore. I have been working with Silverlight support, but to no avail. So I am going to cancel that service and stay DVD only. I think the split sucks, but I think you are right Taylor. I used to really dig Netflix, but I guess all good things come to an end.
 
Has anyone seen this?

"Dear *****,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. 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). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. 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. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments."
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Kegan
 
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