A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated. So if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa.”.Netflix chief content officer Ted Sarandos: "the DVD business has a long life in middle America, it’s just not part of our future."
"I messed up. I owe everyone an explanation." ... Now Netflix is spinning off their DVD-by-mail service into a separate web site, Qwikster.WHAAAAAT? They admit they screwed up and their followup is to double down on their bad decision and lose even more customers?
And, that primarily affects the biggest users of the service, those people who watch so many movies that having both streaming and DVDs makes financial sense?Think about it though, Netflix is a subscription service, so the "biggest users" are actually the least profitable.
The online distribution market is going to balkanize more or less exactly like cable TV did, and for the exact same reasons. Because everyone wants to own the customer and thinks they have enough accumulated awesome content that you'll have to come to them. HBO's already doing it. Sony will have its own online service (it kind of already does for the PS3). So will Disney. So will all of them. And Netflix will probably end up like the original incarnation of American Movie Classics, streaming old RKO movies that nobody's ever heard of because that's all that's leftExactly. There's no need for an intermediary 3rd party to handle streaming. It might be slightly more annoying for the customer, but ultimately there's no reason for the content companies not to do it. They've shown pretty clearly they have no problem pissing off customers (see, non-skippable adverts at the start of a DVD you paid for)
Guess I'm one of the hold-outs... I only use Netflix for the blu-ray discs. The few times I tried watching a streaming movie, it was horrible - the picture quality is nowhere near the same as blu-ray. Maybe it's fine if you're watching on an iPad, or in a 6" window on your computer, but not on a 42" flat-screen...The quality is terrible, of course. But most people just don't care.
Perhaps this is a "Hudsucker Proxy" situation where the Netflix owners are trying to drive the stock down so they could buy more of it.Or sell it short.
kiddie porn selectionswhat
So maybe the idea is that while customers are already mad, and analysts gloomy, you might as well make them as mad and gloomy as possible. The DVD business has to die eventually, so do what you can now to hasten the demise, even if it alienates a few more customers. Meanwhile, use the opportunity to herd Netflix customers into the streaming service, while creating a new brand eventually gives Netflix the psychological distance they need to shut the DVD business down. (We're not pulling a service! We're shutting down an unprofitable business unit. It's not even called Netflix!).I disagree totally however that this has anything to do with the stock dip, public outcry or anything else. The rebranding process must have been in effect long before any of this became public. They're just choosing to bundle the announcement in the context of a mea culpa, just as they would have bundled it with a "MISSION ACCOMPLISHED!" banner had stock prices somehow gone the other way.
...
The thing feels like a panicked reaction to last week's stock gyrations, the product of my favorite Bryan Caplan syllogism:
1. Something must be done
2. This is something
3. Therefore, this must be done.
The best I can come up with is that this is a version of what analysts used to call "Big Bath Accounting": if you have to release bad news, try to release all your bad news in the same quarter. People are already hammering your stock, so you might as well pile on every conceivable problem that could beset your company; later, you can get a nice stock bump by reversing any excessively pessimistic charges and having an upside earnings "surprise".The Qwikster and the Dead
So maybe the idea is that while customers are already mad, and analysts gloomy, you might as well make them as mad and gloomy as possible. The DVD business has to die eventually, so do what you can now to hasten the demise, even if it alienates a few more customers. Meanwhile, use the opportunity to herd Netflix customers into the streaming service, while creating a new brand eventually gives Netflix the psychological distance they need to shut the DVD business down. (We're not pulling a service! We're shutting down an unprofitable business unit. It's not even called Netflix!).
The disappearance of Sony’s movies resulted from a clause in the Starz agreement. According to people familiar with the matter who spoke on condition of anonymity because contract terms are confidential, it includes an undisclosed cap, which has recently been exceeded, on the number of people who can watch Sony movies online.posted by smackfu at 3:11 PM on September 19, 2011
"Qwikster. This is a difficult name to like. It doesn't come with positive emotional connotation, does it? According to [The company's vice president of corporate communications, Steve] Swasey, 'It's still a wholly owned Netflix company. It's a subsidiary. It's branded Qwikster, A Netflix Company, so everybody knows. It's got the same red envelope, only with a different name on it. It's Qwikster instead of Netflix.'posted by ericb at 12:28 PM on September 22, 2011 [1 favorite]
Why not call the new business Netflix DVD? Same red envelopes, same red Netflix! We don't see Apple trying spin off its iPhone or Mac business. We also don't see Amazon looking to remove the Kindle from its core retail business. Rather, these companies are rightfully leveraging their success in one category into results in others. With this move Netflix forces distance between its two units, as well as between itself and its customers."
posted by artlung at 9:43 AM on October 10, 2011
Dear Joe,
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.
This means no change: one website, one account, one password…in other words, no Qwikster.
While the July price change was necessary, we are now done with price changes.
We're constantly improving our streaming selection. We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.
We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.
Respectfully,
The Netflix Team
"When they split the company, they did it in such a way that nobody understood precisely how it was going to work, and that confusion led to a degradation in terms of the brand," Passikoff says.I agree with this exactly. Putting aside the name (which is a problem unto itself), something as drastic as splitting apart two related-in-our-mind-services shouldn't be casually announced via an apologetic email. The corporate response to questions should make it clear that all contingencies have been thought out, and that the company (at least pretends) to care about customers. The most troublesome comment from Hastings (which was later deleted) made it clear that he hadn't considered the fact that people would have to search both netflix and qwickster separately for the same movie! Isn't "customer experience" supposed to be a fundamental part of the Netflix brand?
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But splitting and starting a new company? That just seems silly.
posted by theichibun at 6:48 AM on September 19, 2011 [35 favorites]