I – and I’m guessing many others – received a long, apologetic E-mail from Netflix, which announced that it’s changing its DVD-by-mail service to Qwikster.
However, much of the message seems a bit unclear. There seem to be a lot of apologies for price increases and promises of some kind.
I’ve only been a member of Netflix for a couple of months and I’ve only ever used the instant watch feature. I don’t really understand exactly what Netflix’s apology means – I mean, I understand that the two services have been split and that those wishing to keep both will be paying a total higher monthly fee.
What I don’t understand is exactly what Netflix is saying in this “apology.” Are they rescinding the (effective) price increase? Or is it really just a p.r. statement about the new Qwikster name?
Just PR. Prices are the same. But now you have to deal with 2 different entities if you want to rent DVDs and stream content. Somehow, he thinks this will explain the purdicament they are in. And maybe he’s thinking the DVD unit will eventually go the way of the fax machine (which, for whatever reason, still hasn’t gone away).
It’s just PR. I saw somewhere where they should have named the DVD service “Netflix Classic”, which I think would have been a better way to go. I mean, I’ve been a customer since forever. It irks me, if only mildly, that I have to go to quickster when the streaming people are still under Netflix.
But it’s so low on my list of irritations that I just shrug.
Not only will the fee be higher, but you now have to have two separate accounts, with two separate credit card payments each month.
As the others said, just PR, and really bad PR at that.
What he’s basically saying is, “Sorry about the recent changes, but the changes will still go ahead, and in addition to cranking up the fees, we’ve also decided to make the whole thing even more complicated by splitting the streaming and DVD services, making you pay separately for each one, and splitting your instant and DVD queues so you no longer have a single integrated list.”
To be clear, they are not apologizing for the fact that they changed their price structure, which will result in much higher fees for people who use both services. They are apologizing that they didn’t communicate this change very well to their customer base.
It’s like apologizing that you stepped on someone’s foot just before punching them in the face.
I’m guessing this is a prelude to selling off the DVD side of the business. Having them under seperate names. seperate billing, and seperate website makes that a much easier thing to do.
The whole apology thing is really about saying “We know you don’t like what we did, and you aren’t going to like what we are about to do, but we’re doing it anyway.”
Netflix wanted to let everybody know how colossally bad they are at business strategy, and to fill you in on their plan for breathing new life into their bankrupt rival Blockbuster.
If you guys read the other thread, you’d know this was already explained. Almost certainly Netflix is having to divide up the business in order to keep getting streaming deals, without being charged for customers who just use the DVD service.
DVD rentals are always possible, even if they have to go buy them retail. Streaming rights are not. The former can afford to piss off the providers, the latter can’t. I’m almost certain that’s what “different strategies” means.
If you could point me to somewhere that this explanation was offered with some actual evidence for its validity, rather than just as rampant speculation, i’d appreciate it.
Also, the OP wanted to know what the email means for customers, in terms of how their experience (pricing, convenience, etc.) will change. He didn’t really ask about the corporate motivations behind the changes.
I read some speculation that it was actually a prelude to selling off the online side to Amazon. Amazon can’t afford to get shackled with all the DVD mailing and processing centers that the DVD side has, because that would give it a physical presence and require them to collect sales taxes everywhere, but the online watching side would fit pretty well with Amazon’s current offering.
I’m not sure if DVD processing centers would have the tax effect suggested, but the idea makes at least some sense.
The DVD mailing service is heavily subsidized by underpriced U.S. Postal Service deliveries. Given the trouble that the Postal Service is in, they might be looking to the possibility of increasing delivery costs.