Oh, good. But was Qwickster meant to be the one for physical discs? That doesn’t make sense to me – streaming video is a lot quicker than getting physical discs in the mail!
Yes, but they saw the DVD-by-mail business as the dinosaur, so the rumor was that they would sell or spin off that business. So they wanted to retain the name Netflix for the streaming service. (And there’s a reason that it’s called Netflix.)
Your image explicitly states “Thanks to Netflix…” then goes on to state “consider how much they’ve accomplished for movie and TV fans,” as if they did us consumers a huge favor and we owe them our admiration and shouldn’t complain about the problems they’re introducing.
That’s like saying “Thanks to Blockbuster, video rentals were made available to much larger demographics, including niche movies tailored to local demographics as well as ample supplies of the latest releases. No longer will you have to visit six different small video stores located in three different zipcodes to find the one movie you want to rent. So please, next time you’re considering freaking out about Blockbuster prices, consider how much they’ve accomplished for movie and TV fans.”
Yeah, I guess that makes sense. I’m just glad I don’t have to deal with Qwickster. I don’t care for that name at all, frankly.
I’m of the opinion that the plan to split the DVD and streaming businesses was a genuine one, but hastily done (the stupid name attests to that). My guess is that the business’s profits are getting attacked by both consumers and content providers, and the board of directors started leaning hard on upper management to split the company and maintain profitability. I think they were focused on the numbers and failed to anticipate just how negative the reaction would be.
They listened to the Accountants and didn’t give the Marketing folks time to do the due diligence on their end. It usually works the other way around.
I suspect this whole process will continue and Netflix will become 2 entities, but one will be “Netflix” and one will be “Netflix DVD” or “Netflix Classic”. They’ll probably keep a single sign-on this time around but your queues and billing will happen separately, but the end result will be the same.
The problem though is that we as consumers need Netflix and we need it to remain powerful. If Netflix plummets and collapses the content will end up being streamed solely by the networks and the cable companies, which are becoming one in the same. Prices will be higher due to the lack of competition and we’ll have to have accounts with every studio.
The idea that the DVD/streaming split was a big marketing scheme is laughable. Netflix stock is down ~66% over the past quarter. Billion dollar companies don’t completely alter their business model as a marketing gimmick. Netflix’s model was unsustainable. The content providers have realized the cash cow they have and aren’t going to let NFLX milk it for (almost) free anymore. Now reality is hitting and the company and customers have to adjust. Do people seriously think Netflix wants to piss off their customers?
They tried something, got feedback (the CEO was responding to people on the corporate blog, FFS!), realized their mistake, and have responded by reversing their decision. Good on them.
Not good on them. This is the kind of thing you use focus groups and market research for, you don’t announce it publicly and then backpedal. It’s good that they’re listening, but they shouldn’t have needed such a public correction in the first place.
“Thanks to Netflix” we’ve gone from nearly a dozen stores within a 10 min driving distance with huge selections to one store with a fairly decent selection and a couple of kiosks with shitty selection. Yeah, Netflix is great and all if you have good bandwidth for streaming (I don’t) or like planning out your disc viewing weeks in advance, but if I decide I want to watch something particular tonight, welp, hope the one store left in town has it and no one else rented it out first, or hope the movie came out in the last 6 months to a year so a kiosk has it.
Not saying I begrudge Netflix their past success. Clearly they offered something people wanted. Great. That’s life. But I’m not going to sit here and act like no longer having a Blockbuster or Hollywood or mom&pop (yes we still had some of those long after Blockbuster supposedly killed them all, twas Netflix that finally did them in, methinks) to go grab something to pop in the DVD player RIGHT NOW is a thing deserving of praise. I was never at Blockbuster’s mercy, Blockbuster was an option, nothing more. Losing an option, that kinda sucks.
Kthxbye
I think that picture is a dumb statement. No one cares what it was like in 1995. Butter is at what, 4 dollars? Can I be cranky about that or should I be thankful that Land o’Lakes has saved me from the tyranny of the butter churn?
For the record - Customer since 2005 and …
- We’re gonna charge you more email - Received
- We’re breaking our business into two businesses! email - Never got it.
- Sorry about that last one, don’t know what we were thinking email - Received.
Is something wrong with their system or something?
I got #2 and 3 but never got #1. The routine DVD received/sent emails haven’t always shown up over the past year or so, while they used to arrive like clockwork. Yes, I think something’s wonky about their email system that hasn’t always been that way.
Our house is a big Netflix streaming fan. I think physical media will disappear at some point but that point isn’t now. There are too many people with limited internet connections that can’t use the streaming content that there’s still a market for DVD’s but it’s decreasing every day.
It’s not about what rentals were like. It is about what rentals and streaming will be like once Netflix is gone. Without Netflix, it’s not going to be all you can stream to any device for $8/month.
Go back a few years: Content owners granted Netflix initial streaming rights because they thought it would be a small slice of the market and they could make a little extra revenue. It turned out to be much bigger than anyone expected. Netflix streaming traffic accounted for a sizable chunk of all internet traffic (including torrents). DVD rentals declined. And for the first time in recorded history, US cable subscriptions declined in 2009 and dropped even more in 2010[sup]*[/sup].
Fast forward to the present: Content owners realize they are leaving a chunk of money on the table. Cable companies want to make up for their lost subscriptions by raising the streaming contracts. They all see Netflix as a serious threat – not as an additional source of revenue[sup]**[/sup].
The content owners don’t want to stream movies for $8/month. They want to stream live TV (and movies) for $100-$150/month to balance what people are already paying them.
Netflix is a service provider, not a content provider. It is in their self-interest to pay as little as possible for streaming rights. And, to a great extent, it is in their self-interest to charge as little as possible to customers. This lets them leverage economies of scale. A Netflix with a lot of subscribers has more leverage to negotiate with content providers and minimize costs. A market with a bunch of tiny streaming services will have zero leverage to keep costs low. The industry wants to avoid a service provider monopoly like iTunes had with MP3s.
In this way, Netflix’s self-interest is very much aligned with the consumers. To this end, I think the linked image makes sense. I get the feeling that some people are so frustrated with Netflix that they don’t see the bigger picture.
Ideally for consumers, there would be a few big service provider (e.g. Netflix and Amazon) to keep pressure on the content providers and on each other.
I’m not as well-versed on the Tivo story, but it seems like a similar scenario is playing out again. When all is said and done, consumers will pay more and get less. Whatever happens is fine. The free market can sort it all out and people will pay what the market will bear regardless of what happens Netflix. It won’t personally affect me too much; I take more of an interest in the industry than in the content anyway.
- Netflix is not the only reason for the decline. The economy and more people living together accounted as well.
** Much of the info here is sourced from On The Media produced by WNYC.
How do you figure?
Amazon offers Amazon Prime for $75/year plus free shipping of Amazon purchases.
Hulu plus is at $8/month
Blockbuster Movie pass is $10/month if you have Dish Network.
These 3 are much newer to the game, but I bet within a short time they will have streaming offerings to match or surpass Netflix, which honestly isn’t all that good.
It is a good point, but I don’t think the services directly map.
Hulu focuses on delayed TV. They have movies, but it doesn’t look like a lot yet. Like Netflix, they are having trouble securing streaming rights. They are also a potential buy-out target (although the same might be said of Netflix).
Blockbuster Movie Pass is an add-on to Dish. You have to pay full-price for Dish – that was kind of my point.
Amazon Instant Video has potential, as do Apple and Google. They are all big and have a lot of users.
The weird thing is that the “we received your disc” or “expect this disc tomorrow” emails come in like clockwork for me. But the big event “we’re changing the way we do business” emails are hit and miss.
Me too and they aren’t even in the SPAM folder.
I got the one about Qwikster’s death, but only receive a few of the other ones they send.
TBG, well said. I’ve never been a Netflix subscriber, because I *like *browsing. I like looking to see what seems interesting tonight. I’m even OK with not being able to get that movie that I wanted; it’ll be there sometime later. Luckily, we’ve still got a great mom & pop shop in town with an excellent selection, so we’re set. But if they go out of business, I’m screwed.
So you don’t mind if you don’t get it right away, and you like the ability to browse. So how doesn’t Netflix meet your needs?