It seems I'm in the minority who thinks this is an over the top reaction to Wall Street pressure. It was clear for a number of years now that Netflix saw streaming as the future. But cutting off the DVD business like that... it's extreme. A lot of the movies are not available for streaming. Yes, their streaming portfolio is probably still the best (and has excellent children's content, my son watches it every night) but why force your users to decide?
The problems, as I see them:
1. The two parts (DVD & streaming) had different characteristics (bigger collection vs. instant gratification) that balanced each other. This synergy is now gone.
2. The attack surface for other companies has just doubled. Netflix's DVD handling is super streamlined (they have special sorters in postal centers) but there are other strong players like Redbox here. The streaming biz is nothing unique, Amazon can easily get to that level of collection in a short time. Divide and conquer? They just did it to themselves!
3. As others have pointed out, the reviews, and user histories will be split. From a subscriber perspective this is most undesirable, now I have to deal with two sites.
4. The quality of recommendations will suffer with less data (they weren't great to start with) after the split.
5. How will this affect developers using the Netflix API?
6. What will happen to Netflix's original content creation efforts, this will be a huge distraction to those. And they are vital.
Overall, this has a heavy handedness to it that makes you wish for the comfort of the likes of Amazon.
EDIT: This also makes my suspicions that Amazon is gearing up to a massive upgrade of their offering soon. Netflix probably tried to focus on streaming and stay ahead in the game. How? I don't know.
The attack surface for other companies has just doubled
If anything, that is an underestimate. I really can't understand what they are thinking. Since I am interested in both DVD and streaming, up to now I was completely locked into Netflix because of the integrated system - my "Instant" queue is just the subset of my DVD queue that is streamable.
If they break that link, and I derive no gain from being BOTH a Netflix-DVD and a Netflix-streaming customer, what is there to stop me switching to Amazon or other competing streaming service tomorrow? Absolutely nothing.
This is such a bad decision I actually can't even begin to understand how it made sense to the dude for the whole length of time it took him to write that announcement.
Edit: and another thing. Am I expected to believe that a technology company cannot figure out how to run two different business arms with a single customer-facing UI/website? This is something frigging clothing companies do every day.
"...A lot of the movies are not available for streaming."
Quite a lot, actually, including the majority of new releases. And this will only become more evident in the eyes of streaming subscribers when they no longer see most of the new titles listed in searches. (Even the presence of those "Only available on DVD" titles in streaming-service SERPs lent a sort of subconscious, psychological indication of the robustness of Netflix's library).
Hard to see what Netflix stands to gain here. Streaming may be the future of media consumption, but there are still a few big hurdles to leap. Placing all the eggs in the streaming basket now feels a tiny bit premature. It's entirely possible now that streaming will win the day, but it'll be a competitor (or two) waving the victory flag.
Another thing. Not all users have a device connected to their TV that works with Netflix (like an Xbox).
Nor do those same people want to watch a movie or a TV show on their computer.
Those people request DVDs.
I don't see the issue with keeping everything under one brand.
Netflix became popular because of their DVD-in-the-mail service. It's a shame to spin that off into a sub-par seeming brand. Just keep it all under one house but emphasize the streaming service.
It's not like they can't design their one site to give users an option on what they want (streaming or DVD-in-the-mail).
Keep it simple, stupid.
If they are doing this because of the economics of the DVD and streaming service, then nevermind.
DVDs are on their way out and streaming is now in and he's putting all his efforts into the streaming business.
What if Microsoft did something similar? What if the CEO in 1998 put all his efforts and attention into the Web? Results for Microsoft might have been much better.
Content is everything... and Netflix is finding that losing Starz (and by proxy, Disney and Sony catalog) really really hurts.
Why did they lose Starz? Because they are too successful, and their suppliers are nervous about Netflix. Too many subscribers = too much cost.
To reduce their size they'll need to split the two services, and let each one compete directly.
To be honest, I would love to have Netflix's problems. Growing too fast and having to pivot your business model to keep your agility? Netflix is operating like a startup. Good for them.
1. I think that's your best point, and it's true that the real test will be if they can grow their streaming catalog enough.
3. It's not as if this HAS to be that way. In a blog comment Hastings said initially both sites would have all existing and current data. We're technologists here, is it hard for anybody here to imagine how sharing that data would work?
6. How will it be a distraction to now have a company that is solely focused on streaming -- which is the umbrella under which the original content is being created?
Wouldn't you agree that the economics of show-running fit a lot more acceptably into a business where the primary cost is content licensing vs a business where the primary cost is dozens of physical warehouses and massive USPS fees?
Regarding the API, Netflix announced several months ago that the API was going stop supporting DVD options all together: http://techblog.netflix.com/2011/06/upcoming-changes-to-open.... This makes me wonder how long they knew that this split was coming, or if it is just a coincidence.
I'll throw it out as a side note, because in all the discussions I've read on Netflix of late no one seems to mention it: Netflix has FANTASTIC kids content available for streaming. My kids would revolt if we cancelled our service. That alone guarantees my business until there is a truly compelling replacement. I cannot believe we're the only family like this. And while this is probably not a large enough market to sustain them (let alone power growth), they do seem to have a pretty good sense of how people engage with their content - and my guess is that their deep long-tail of streaming content actually holds more appeal than might be guessed. To be honest, my only frustration with them of late has been the fact that my streaming queue is overrun with "Bob the Builder" & "Caillou" when I'm actually looking for something to watch. Perhaps this new, sharper focus on the streaming side will enable them to improve things like this? Here's hoping they survive this transformation and emerge stronger for it.
Yup. My kid is only two, but even I have noticed that Netflix has 6 full seasons of Spongebob and nearly 100 full episodes of Seasame Street. It's pretty important to me that my child not be bombarded by advertisements before he gains any critical thinking skills, so I'll be a Netflix customer for a long time yet, I'm sure. I'm just hoping they use this extra cash to get some better content (or create it themselves) for me.
Yes, it's really frustrating that Netflix only allows streaming from the primary account and none of the sub accounts. Anything we stream shows up on the recently watched list for our kids to see.
In my opinion, this is definitely the obvious and correct move. It isn't a surprise that Netflix wanted to head towards a stream only business model, but this makes it crystal clear that Netflix is (at the moment) a premium streaming video company. I mean look at them, thats all they do now!
The still face some big hurdles with all their streaming content deals, and the outcome will likely be what makes or breaks the Netflix we all know and love. Premium content providers (HBO, Starz, and now AMC, etc...) will always hold the upper hand here, and many already have streaming products in place. If not, its rather trivial to create nowadays.
My prediction: Netflix becomes an original content powerhouse that harnesses the sort of democratic whimsey of the web. "House of Cards" is their toe in the water. I really see no other direction that is feasible with content providers fragmenting into their space and hoarding their popular original content.
"this makes it crystal clear that Netflix is a premium streaming video company. I mean look at them, thats all they do now!"
Yeah, well...now they're providing a commodity service. Renting DVDs through the mail has/had a huge infrastructure advantage for the established player. Streaming video over the internet? There are dozens of sites that do it well. The technical advantage is far less sustainable, because it isn't nearly as difficult.
Once you're running a streaming-video business, the only differentiating advantage is content -- and you're in a weak position to negotiate for that content. Whereas before, the studios needed Netflix to distribute their content to consumers, the internet has turned the tables.
I think this is a good move simply because the two divisions have contradictory goals at this point.
For example, the Qwikster division should be looking at finding ways to deliver DVDs quicker (Kiosks for example). But that's not something that would ever occur to Netflix because they're focused on streaming as the future.
Which is where the contradiction comes in. It is hard to run a business unit when the goal of the company overall is to kill off your unit.
That said I think announcing it today is foolish. Even if it was their original plan to do so announcing it right after a stock drop makes the decision look rash. IMHO they should have put this announcement off for a couple weeks.
I don't think any shareholders of consequence are going to think they just made this decision a day ago. Maybe they announced it after the stock plummeted because the assumption is it won't go down that much further, where a 2nd announcement after it rebounded might send it down yet again.
In terms of stock timing, I have a hard time believing that this kind of move was completely held secret. This takes a lot of prep work, and whispering has to go on, and rumors spread fast to connected people who can profit. I suspect the excessive reaction last week to the news of that week may have actually been boosted by inside knowledge about this move today.
So if any of that's true, you can't exactly assume that last week's stock move would have been the same in an alternate world where they weren't going to announce this today. At any rate, appearances generally give way to fact eventually.
Also I don't get the creating of a new brand altogether. Netflix is a popular brand and a household name. Who knows qwikster? Looks indicative of a future split up of the company to me.
"...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."
Wow. I had previously thought that their pricing change was forcing consumers to effectively choose between streaming and disc-based services, but didn't expect that they'd actually go this far and completely cut the cord between the two.
Considering the how much less efficient it is to mail movies than it is to download them in an age of high gas prices and fast internet, Netflix killing or spinning-off it's dvd service was an inevitability. I'm just not sure that right now the streaming service by itself has the selection to keep subscription numbers high enough to maintain sufficient leverage with content providers.
Momentum is very important with the type of model they have: the more content Netflix loses to studios who start their own streaming services, the less appealing the Netflix service becomes to subscribers, which both weakens the argument for studios to stick with them due to the size of their subscriber base and also sets a positive example of succeeding without Netflix that other studios can follow.
My guess is that the logical split has to do with future contract negotiations. Netflix has no ties to DVD rentals, so maybe this aids them in the deals they are able to make.
Yep. Also netflix has no value add in the streaming business. Streaming a video just isnt that hard and they are not content owners. The content owners have no incentive to put their stuff on netflix.
The content owners will try to insert ads and cut out middlemen.
On the other hand the customer is shafted big time by being forced to remember what he wants to watch on dvd separate from streaming.
Biggest downfall here will potentially be the separation of ratings. Dvd and streaming customers will have to rate dvd first and then see it as unwatched in streaming later?
I think of Netflix as my repository for "what I have watched" and teller of "what you will want to watch". I don't tie the brand to a specific delivery mechanism (dvd or streaming).
Qwikster is a terrible name, and this is a terrible move.
Hastings is now in competition with that guy running HP to see who can destroy their company first.
Maybe Ballmer will get in the game and spin off Windows/Office from Microsoft, and rebrand them "Facetown", while proclaiming Bing to be the future of the company.
Unbelievable.
Update: I predict Qwikster is dead and buried within 5 years, and someone else pushes past Netflix on the streaming side to be the leader there.
This move is unbelievably stupid. Any trust I had in Netflix over the long haul is gone.
I've been reading all the comments here and at Reed's blog to understand what everyone has to say about the split. Internally, we've known about the split for some time now.
Why do you think this is a terrible move? Your comment has a lot of unflattering comparisons, but doesn't explain why the move is stupid.
Also, you're probably right that DVD as a service will not last forever, and Reed understands that too (he mentions this in the post as well - http://blog.netflix.com/2011/09/explanation-and-some-reflect...). DVD service may not last very long, but right now, it is a growing business.
The elephant in the streaming office is the lack of blockbuster titles, many of which are only available through their DVD by mail business. If they're betting everything on streaming i'm guessing (hoping) that they've also figured out a solution to this problem. Otherwise, they've lost the big benefit of credibility that DVD by mail brought to their service.
The answer to getting new releases is obvious and I'm surprised they haven't done it already: pay-per-view. 3.99 for new releases, back catalog is free. What Amazon does, except they would have the advantage of the massive customer base. They could probably work out some deals with the studios where if a movie makes X amount on PPV it gets to move to the back catalog for a minimum of 6 months. Having that customer base would give them the leverage to make those types of deals.
Just for posterity's sake, I'll join in on the "this is a great move" side.
I know there's a lot of wailing and gnashing of teeth by current Netflix customers with established movie watching habits who will now face more inconvenience.
However, I use Netflix exclusively for the streaming, so I'm very excited about the future here. If they can sell off the Quikster (sp? dumb name) business and then use that capital for all sorts of good streaming stuff, then that's good for me.
I remember reading an interview with Hastings a long time ago where he said his vision was all about streaming content (hence the name, "Netflix" from the start, and nothing locking him down to DVDs, which he felt would someday be obsolete leaving his company with an anachronistic name). At that time, though, so many people only had dial-up that it just wasn't feasible.
It's interesting and somewhat amusing to me that the interim "send DVDs by mail" business got to be so huge and successful, but I see Hastings as finally trying his hand at his initial dream.
More power to him, I say, as a decade or two down the line, it will be streaming all the way, no doubt.
I posted this on their blog before I saw the thread here:
Remember the quote by Henry Ford? It went more or less like: "If I asked customers what they wanted, they'd have told me a faster horse." The truth is, all the customers here -- myself included -- are probably the least qualified people to say this is a bad idea.
I do think that some communication between the 2 sites is important. But it's not as if that's off the table. Once they get around to developing it, it won't be hard to have an "Available On Netflix" link beside entries on your Qwikster queue. In fact, doing so would be effective cross-promotion.
The truth to me seems to be this: These really are very different businesses. And it's true streaming is the future. I expect Blu Ray to be the last optical disc player people ever buy. From there on, it's all streaming.
A future we could've faced is one where Netflix devotes more and more resources to streaming license fees and data centers, they close regional netflix warehouses, dvd delivery goes back to 2+ days instead of the 1 day it currently is for most the US population. In general, the DVD service is choked of leadership talent within the company and capital improvements.
Now, there's a CEO of DVD's by mail. A man who has full budgetary powers over just the DVD business. A business NFLX KNOWS how to run profitably and repeatably. It's a franchise. They've got that stuff DOWN.
I'm not an apologist. I currently opted to pay for both services and I'm not happy about the price increase. But, I'll wait and see. In 6-12 months, if we don't see some big improvements in stream selection, I'll probably chose to cancel that side of my account, and use Hulu Plus and Amazon instead. But for now, I respect the hard decisions businesses make when they see the need to pivot.
This decision was not made over night, and this change has been coming for quite a while. In fact, if you go look at this post on Netflix's API blog dated 27 June 2011[1], you'll see:
As of Oct. 14th, 2011, the Netflix API will be focused exclusively on offering content and functionality from the streaming catalog. As a result, we will be discontinuing the support of DVD-related features in the Open API.
They go on to say that this is to support long term goals around internationalization, but that does not, by any means, preclude this split.
I know the Netflix name was chosen from the beginning to be compatible with a future streaming business, but seeing this chrysalis-style business plan unfold now is quite astounding in its long-term thinking.
People always go up in arms about change of price like this. For a long time, the prices at Netflix mostly stayed the same because they started with DVDs, and later added streaming. The streaming catalog wasn't built out enough for them to monetize it with confidence. So what did they do? They gave us a break and let us have free streaming. Now that it's a significant catalog, they want us to pay for the service... which they have to license! And it aint cheap for them to do that.
Now that it's doubled, people feel it's outrageous! But it's not because of the value they're receiving, it's because they're conditioned to expect one price and it's now higher. They lost a million subscribers, but Netflix will get those back after people realize they were being idiots.
Let me ask you a question, would you rather pay $15 a month for unlimited streaming and DVDs, or $50 to Comcast for basic cable? In my book, $15 is a pretty damn reasonable price.
It's not the change of price that has everyone upset tonight. That already happened.
What has people upset tonight is what customers will lose in this change: the convenience of a single website to find interesting movies and TV shows and arrange to view them by whichever delivery means is available.
They actually have been steadily raising prices. It's been really bad for those getting BRDs -- they've had 3 or 4 price increases. I think this is just the proverbial straw that broke the camel's back. We're getting no extra value for the increased price.
I read this and my brain immediately thought it had to be an April Fools joke. It took a second or two to remember it is September.
Regardless, my hat is off to them for betting the company's name on their streaming business. I know that's the only part of their service I use anymore -- I've had the same DVD checked out for over a year because I couldn't be bothered to deal with the perceived hassle of managing my queue and planning what I want to watch in advance.
I researched Netflix for a project back when they had around 8 million subscribers and the biggest part of their business was direct mail DVD.
The strides they've come to have the Netflix brand as more than just a DVD rental service are immense. My only worry about this move is that they lose all of that brand recognition with "Qwikster."
I kept my account even after planning on dropping it when the price increase happened, but now I don't really see any reason to keep my streaming account. At least when they were integrated, searching in one place, and having all my reviews in one place provided some additional benefit for me.
Now I don't really see any benefit at all for keeping the streaming portion over Amazon Prime (which I have) and maybe adding Hulu Plus. I'll have to see if having the game option makes it useful for me to keep the DVD portion of my account.
As soon as the sites split, NetFlix looses a great deal of value to me as a customer. Before it was a single place where I could pick movies to see - whether streaming or on DVD, now it becomes a repository of a bunch of okay television shows and (esp. once they lose Starz Play), a mediocre movie selection.
The real question to ask is: Is this good for customers?
It doesn't matter if the goals of the two businesses are different. What matters is how it affects customers. Do customers consider the services as separate entities or as two parts of the same whole?
I think they'll lose a few customers who like both services, but feel awkward about dealing with two companies now instead of one (like me).
For the record, since Netflix Canada launched sometime last year, it has been a streaming-only service. We have a kind of sucky selection that is getting better as time passes, but I can understand why they went streaming-only. From this perspective, it's pretty odd seeing people disapproving of the choice or showing attachment to the DVD service.
In theory, however, Qwikster doesn't have to limit itself to DVD's in the future. If it's real focus is shipping speed for items that are rented (or more likely purchased), it could expand into other product lines. Speed of shipping is a process in and of itself, something that very few companies, like Amazon, have gotten down.
"Qwikster will also now offer video game rentals through the mail"
While I wouldn't sign up full time for a game rental service I would be interested in getting a game now and then rather than a dvd. Suffice it to say for my needs a dvd in the mail fit my needs exactly and I will continue paying for that.
Edit: not to mention from what I hear games always have a long waiting list on other services. I am more than happy to put a game at the top of my list and getting it at some point in the next two months, but meanwhile getting dvd's that I want.
[+] [-] Jun8|14 years ago|reply
The problems, as I see them:
1. The two parts (DVD & streaming) had different characteristics (bigger collection vs. instant gratification) that balanced each other. This synergy is now gone.
2. The attack surface for other companies has just doubled. Netflix's DVD handling is super streamlined (they have special sorters in postal centers) but there are other strong players like Redbox here. The streaming biz is nothing unique, Amazon can easily get to that level of collection in a short time. Divide and conquer? They just did it to themselves!
3. As others have pointed out, the reviews, and user histories will be split. From a subscriber perspective this is most undesirable, now I have to deal with two sites.
4. The quality of recommendations will suffer with less data (they weren't great to start with) after the split.
5. How will this affect developers using the Netflix API?
6. What will happen to Netflix's original content creation efforts, this will be a huge distraction to those. And they are vital.
Overall, this has a heavy handedness to it that makes you wish for the comfort of the likes of Amazon.
EDIT: This also makes my suspicions that Amazon is gearing up to a massive upgrade of their offering soon. Netflix probably tried to focus on streaming and stay ahead in the game. How? I don't know.
[+] [-] frossie|14 years ago|reply
If anything, that is an underestimate. I really can't understand what they are thinking. Since I am interested in both DVD and streaming, up to now I was completely locked into Netflix because of the integrated system - my "Instant" queue is just the subset of my DVD queue that is streamable.
If they break that link, and I derive no gain from being BOTH a Netflix-DVD and a Netflix-streaming customer, what is there to stop me switching to Amazon or other competing streaming service tomorrow? Absolutely nothing.
This is such a bad decision I actually can't even begin to understand how it made sense to the dude for the whole length of time it took him to write that announcement.
Edit: and another thing. Am I expected to believe that a technology company cannot figure out how to run two different business arms with a single customer-facing UI/website? This is something frigging clothing companies do every day.
[+] [-] jonnathanson|14 years ago|reply
Quite a lot, actually, including the majority of new releases. And this will only become more evident in the eyes of streaming subscribers when they no longer see most of the new titles listed in searches. (Even the presence of those "Only available on DVD" titles in streaming-service SERPs lent a sort of subconscious, psychological indication of the robustness of Netflix's library).
Hard to see what Netflix stands to gain here. Streaming may be the future of media consumption, but there are still a few big hurdles to leap. Placing all the eggs in the streaming basket now feels a tiny bit premature. It's entirely possible now that streaming will win the day, but it'll be a competitor (or two) waving the victory flag.
[+] [-] omarchowdhury|14 years ago|reply
Nor do those same people want to watch a movie or a TV show on their computer.
Those people request DVDs.
I don't see the issue with keeping everything under one brand.
Netflix became popular because of their DVD-in-the-mail service. It's a shame to spin that off into a sub-par seeming brand. Just keep it all under one house but emphasize the streaming service.
It's not like they can't design their one site to give users an option on what they want (streaming or DVD-in-the-mail).
Keep it simple, stupid.
If they are doing this because of the economics of the DVD and streaming service, then nevermind.
[+] [-] va_coder|14 years ago|reply
What if Microsoft did something similar? What if the CEO in 1998 put all his efforts and attention into the Web? Results for Microsoft might have been much better.
[+] [-] r00fus|14 years ago|reply
Why did they lose Starz? Because they are too successful, and their suppliers are nervous about Netflix. Too many subscribers = too much cost.
To reduce their size they'll need to split the two services, and let each one compete directly.
To be honest, I would love to have Netflix's problems. Growing too fast and having to pivot your business model to keep your agility? Netflix is operating like a startup. Good for them.
[+] [-] encoderer|14 years ago|reply
3. It's not as if this HAS to be that way. In a blog comment Hastings said initially both sites would have all existing and current data. We're technologists here, is it hard for anybody here to imagine how sharing that data would work?
6. How will it be a distraction to now have a company that is solely focused on streaming -- which is the umbrella under which the original content is being created?
Wouldn't you agree that the economics of show-running fit a lot more acceptably into a business where the primary cost is content licensing vs a business where the primary cost is dozens of physical warehouses and massive USPS fees?
[+] [-] pivotal|14 years ago|reply
[+] [-] crgt|14 years ago|reply
[+] [-] pkulak|14 years ago|reply
[+] [-] ja27|14 years ago|reply
[+] [-] sk_0919|14 years ago|reply
You certainly aren't..They actually have a tab called "Just for kids"
[+] [-] JeffDClark|14 years ago|reply
[+] [-] bryanh|14 years ago|reply
The still face some big hurdles with all their streaming content deals, and the outcome will likely be what makes or breaks the Netflix we all know and love. Premium content providers (HBO, Starz, and now AMC, etc...) will always hold the upper hand here, and many already have streaming products in place. If not, its rather trivial to create nowadays.
My prediction: Netflix becomes an original content powerhouse that harnesses the sort of democratic whimsey of the web. "House of Cards" is their toe in the water. I really see no other direction that is feasible with content providers fragmenting into their space and hoarding their popular original content.
[+] [-] timr|14 years ago|reply
Yeah, well...now they're providing a commodity service. Renting DVDs through the mail has/had a huge infrastructure advantage for the established player. Streaming video over the internet? There are dozens of sites that do it well. The technical advantage is far less sustainable, because it isn't nearly as difficult.
Once you're running a streaming-video business, the only differentiating advantage is content -- and you're in a weak position to negotiate for that content. Whereas before, the studios needed Netflix to distribute their content to consumers, the internet has turned the tables.
[+] [-] TomOfTTB|14 years ago|reply
For example, the Qwikster division should be looking at finding ways to deliver DVDs quicker (Kiosks for example). But that's not something that would ever occur to Netflix because they're focused on streaming as the future.
Which is where the contradiction comes in. It is hard to run a business unit when the goal of the company overall is to kill off your unit.
That said I think announcing it today is foolish. Even if it was their original plan to do so announcing it right after a stock drop makes the decision look rash. IMHO they should have put this announcement off for a couple weeks.
[+] [-] earbitscom|14 years ago|reply
[+] [-] Aron|14 years ago|reply
So if any of that's true, you can't exactly assume that last week's stock move would have been the same in an alternate world where they weren't going to announce this today. At any rate, appearances generally give way to fact eventually.
[+] [-] barista|14 years ago|reply
[+] [-] morrow|14 years ago|reply
Wow. I had previously thought that their pricing change was forcing consumers to effectively choose between streaming and disc-based services, but didn't expect that they'd actually go this far and completely cut the cord between the two.
Considering the how much less efficient it is to mail movies than it is to download them in an age of high gas prices and fast internet, Netflix killing or spinning-off it's dvd service was an inevitability. I'm just not sure that right now the streaming service by itself has the selection to keep subscription numbers high enough to maintain sufficient leverage with content providers.
Momentum is very important with the type of model they have: the more content Netflix loses to studios who start their own streaming services, the less appealing the Netflix service becomes to subscribers, which both weakens the argument for studios to stick with them due to the size of their subscriber base and also sets a positive example of succeeding without Netflix that other studios can follow.
[+] [-] evandena|14 years ago|reply
[+] [-] unknown|14 years ago|reply
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[+] [-] ABCD_FUFU|14 years ago|reply
The content owners will try to insert ads and cut out middlemen.
On the other hand the customer is shafted big time by being forced to remember what he wants to watch on dvd separate from streaming.
[+] [-] unknown|14 years ago|reply
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[+] [-] sandieman|14 years ago|reply
I think of Netflix as my repository for "what I have watched" and teller of "what you will want to watch". I don't tie the brand to a specific delivery mechanism (dvd or streaming).
[+] [-] foobarbazoo|14 years ago|reply
Hastings is now in competition with that guy running HP to see who can destroy their company first.
Maybe Ballmer will get in the game and spin off Windows/Office from Microsoft, and rebrand them "Facetown", while proclaiming Bing to be the future of the company.
Unbelievable.
Update: I predict Qwikster is dead and buried within 5 years, and someone else pushes past Netflix on the streaming side to be the leader there.
This move is unbelievably stupid. Any trust I had in Netflix over the long haul is gone.
[+] [-] arithmetic|14 years ago|reply
I've been reading all the comments here and at Reed's blog to understand what everyone has to say about the split. Internally, we've known about the split for some time now.
Why do you think this is a terrible move? Your comment has a lot of unflattering comparisons, but doesn't explain why the move is stupid.
Also, you're probably right that DVD as a service will not last forever, and Reed understands that too (he mentions this in the post as well - http://blog.netflix.com/2011/09/explanation-and-some-reflect...). DVD service may not last very long, but right now, it is a growing business.
[+] [-] commandar|14 years ago|reply
This is the direction the physical DVD side of Netflix's business was going anyway.
[+] [-] Lukeas14|14 years ago|reply
[+] [-] pkulak|14 years ago|reply
[+] [-] MatthewPhillips|14 years ago|reply
[+] [-] earbitscom|14 years ago|reply
[+] [-] losvedir|14 years ago|reply
I know there's a lot of wailing and gnashing of teeth by current Netflix customers with established movie watching habits who will now face more inconvenience.
However, I use Netflix exclusively for the streaming, so I'm very excited about the future here. If they can sell off the Quikster (sp? dumb name) business and then use that capital for all sorts of good streaming stuff, then that's good for me.
I remember reading an interview with Hastings a long time ago where he said his vision was all about streaming content (hence the name, "Netflix" from the start, and nothing locking him down to DVDs, which he felt would someday be obsolete leaving his company with an anachronistic name). At that time, though, so many people only had dial-up that it just wasn't feasible.
It's interesting and somewhat amusing to me that the interim "send DVDs by mail" business got to be so huge and successful, but I see Hastings as finally trying his hand at his initial dream.
More power to him, I say, as a decade or two down the line, it will be streaming all the way, no doubt.
[+] [-] encoderer|14 years ago|reply
Remember the quote by Henry Ford? It went more or less like: "If I asked customers what they wanted, they'd have told me a faster horse." The truth is, all the customers here -- myself included -- are probably the least qualified people to say this is a bad idea.
I do think that some communication between the 2 sites is important. But it's not as if that's off the table. Once they get around to developing it, it won't be hard to have an "Available On Netflix" link beside entries on your Qwikster queue. In fact, doing so would be effective cross-promotion.
The truth to me seems to be this: These really are very different businesses. And it's true streaming is the future. I expect Blu Ray to be the last optical disc player people ever buy. From there on, it's all streaming.
A future we could've faced is one where Netflix devotes more and more resources to streaming license fees and data centers, they close regional netflix warehouses, dvd delivery goes back to 2+ days instead of the 1 day it currently is for most the US population. In general, the DVD service is choked of leadership talent within the company and capital improvements.
Now, there's a CEO of DVD's by mail. A man who has full budgetary powers over just the DVD business. A business NFLX KNOWS how to run profitably and repeatably. It's a franchise. They've got that stuff DOWN.
I'm not an apologist. I currently opted to pay for both services and I'm not happy about the price increase. But, I'll wait and see. In 6-12 months, if we don't see some big improvements in stream selection, I'll probably chose to cancel that side of my account, and use Hulu Plus and Amazon instead. But for now, I respect the hard decisions businesses make when they see the need to pivot.
[+] [-] aaronbrethorst|14 years ago|reply
As of Oct. 14th, 2011, the Netflix API will be focused exclusively on offering content and functionality from the streaming catalog. As a result, we will be discontinuing the support of DVD-related features in the Open API.
They go on to say that this is to support long term goals around internationalization, but that does not, by any means, preclude this split.
[1] http://developer.netflix.com/blog/read/Upcoming_Changes_to_t...
[+] [-] mortenjorck|14 years ago|reply
[+] [-] ethank|14 years ago|reply
[+] [-] superkinz|14 years ago|reply
Now that it's doubled, people feel it's outrageous! But it's not because of the value they're receiving, it's because they're conditioned to expect one price and it's now higher. They lost a million subscribers, but Netflix will get those back after people realize they were being idiots.
Let me ask you a question, would you rather pay $15 a month for unlimited streaming and DVDs, or $50 to Comcast for basic cable? In my book, $15 is a pretty damn reasonable price.
[+] [-] Stratoscope|14 years ago|reply
What has people upset tonight is what customers will lose in this change: the convenience of a single website to find interesting movies and TV shows and arrange to view them by whichever delivery means is available.
[+] [-] tomjen3|14 years ago|reply
Until that happens, neither of your two offerings are worth considering.
Those who are more deviously than me would say that rapidshare.com is the best alternative right now.
[+] [-] hdctambien|14 years ago|reply
[+] [-] nirvdrum|14 years ago|reply
[+] [-] hesdeadjim|14 years ago|reply
Regardless, my hat is off to them for betting the company's name on their streaming business. I know that's the only part of their service I use anymore -- I've had the same DVD checked out for over a year because I couldn't be bothered to deal with the perceived hassle of managing my queue and planning what I want to watch in advance.
[+] [-] krashidov|14 years ago|reply
The strides they've come to have the Netflix brand as more than just a DVD rental service are immense. My only worry about this move is that they lose all of that brand recognition with "Qwikster."
[+] [-] bethling|14 years ago|reply
Now I don't really see any benefit at all for keeping the streaming portion over Amazon Prime (which I have) and maybe adding Hulu Plus. I'll have to see if having the game option makes it useful for me to keep the DVD portion of my account.
As soon as the sites split, NetFlix looses a great deal of value to me as a customer. Before it was a single place where I could pick movies to see - whether streaming or on DVD, now it becomes a repository of a bunch of okay television shows and (esp. once they lose Starz Play), a mediocre movie selection.
[+] [-] eternalmatt|14 years ago|reply
[+] [-] meemo|14 years ago|reply
[+] [-] nihilocrat|14 years ago|reply
[+] [-] dr_|14 years ago|reply
[+] [-] icefox|14 years ago|reply
While I wouldn't sign up full time for a game rental service I would be interested in getting a game now and then rather than a dvd. Suffice it to say for my needs a dvd in the mail fit my needs exactly and I will continue paying for that.
Edit: not to mention from what I hear games always have a long waiting list on other services. I am more than happy to put a game at the top of my list and getting it at some point in the next two months, but meanwhile getting dvd's that I want.