Netflix cancels plans to spin off disc mailing business as Qwikster

Posted:
in iPod + iTunes + AppleTV edited January 2014
Responding to customer backlash, Netflix on Monday announced that it will no longer spin off its DVD-by-mail business as a new operation dubbed Qwikster.



In a post at the company's official blog, Netflix CEO Reed Hastings said that it was "clear" that customers didn't want to have their streaming and disc-based queues listed on separate websites. As a result, the company will retain one website, one account and one password for its customers.



"In other words, no Qwikster," Hastings wrote. The company's price hikes that went into effect in July will, however, remain.



The decision to ax Qwikster before it even launched is the second major change of heart from the company in recent weeks. Netflix announced last month that it would spin off its DVD and Blu-ray mailing service as Qwikster, a change initially made in response to subscriber backlash over higher prices for rentals of physical discs.



At the time, Hastings said it was apparent that streaming and DVD by mail were becoming two very different businesses with different cost structures. He said the companies needed to be marketed differently and would operate independently.



The change would have positioned Netflix as a more direct competitor to Apple and iTunes, which offers digital-only service for movie rentals and purchasing of TV shows. While Netflix is exclusively a rental service, movie rentals are offered on iTunes, but Apple is largely focused on purchases.



Apple attempted to take a larger share of the rental business when it relaunched its Apple TV set top box in late 2010 with new 99-cent TV show rentals. But the company abandoned that strategy in August, noting that customers "overwhelmingly" preferred buying TV shows over renting them.







Netflix is the dominant player in digital video delivery in America, with a study from the NPD Group pin March showing its Instant Watch service represents 61 percent of all paid digital video viewings. Apple, by comparison, took just 4 percent of domestic streaming and downloadable video content.



While Netflix dominates the online rental market, Apple is the undisputed leader in terms of digital content sales -- a market where Netflix does not compete. A study released in February showed that the iTunes Movie Store represented 64.5 percent of digital video sales.
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Comments

  • negafoxnegafox Posts: 480member
    I just cancelled Netflix because it seems like they are mostly just B-movies and cheap knock-offs nowadays. I used to watch Netflix far more than cable. Are there any good alternative video streaming streaming services?
  • cajuncajun Posts: 95member
    Quote:
    Originally Posted by Negafox View Post


    I just cancelled Netflix because it seems like they are mostly just B-movies and cheap knock-offs nowadays. I used to watch Netflix far more than cable. Are there any good alternative video streaming streaming services?



    I think you have several services now that will be roughly the same in terms of content quality -- Netflix, Hulu Plus, and Amazon Prime. Some newer titles, tons of older titles. It really depends on which service's content set most closely matches your interests. The only thing Netflix doesn't offer yet is a pay-per-view model, but you can supplement that with Blockbuster's website.
  • maclvr03maclvr03 Posts: 155member
    I'm glad they came to their senses. This would have been the worst marketing mistake ever. Netflix is such an established brand, everyone knows Netflix.



    Getting the regular consumer to differentiate between streaming for Netflix and Qwikster for DVD's would have been so confusing. Not the mention the fact separate queue's for both...
  • gmcalpingmcalpin Posts: 266member
    Jesus, Netflix needs a new CEO.



    I didn't like the decision to split the company in two, but if they had really thought this shit through before announcing the split and there was a good, compelling reason to split the two services, they should follow through on that, whether their customers like it or not.



    Instead, they look like idiots, and their customers don't know what the hell to expect next.



    (That said, I cancelled my DVD service when they announced the split and added it back once they announced the cancellation of the split, because I still think it's a fantastic service for the price? even if it's 60% higher than I was paying three months ago. So I'm an idiot, too.)
  • supremedesignersupremedesigner Posts: 72member
    Quote:
    Originally Posted by cajun View Post


    I think you have several services now that will be roughly the same in terms of content quality -- Netflix, Hulu Plus, and Amazon Prime. Some newer titles, tons of older titles. It really depends on which service's content set most closely matches your interests. The only thing Netflix doesn't offer yet is a pay-per-view model, but you can supplement that with Blockbuster's website.



    I prefer Hulu+ anytime these day since it's the only online provider that provided most captioned shows. Until then, I'm sticking to it unless Apple brings up the subscription of movies then I'm sold.
  • mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by Negafox View Post


    I just cancelled Netflix because it seems like they are mostly just B-movies and cheap knock-offs nowadays. I used to watch Netflix far more than cable. Are there any good alternative video streaming streaming services?



    It must be the movie studios that are screwing things up because their selection of DVDs is much better than their streaming selection. Not sure why that is.
  • vanderbobvanderbob Posts: 6member
    there must some French or Italian situation comedy flick that portraits an idiot of a man trying to decide best way to kill himself...



    Next logical step for Netflix is to go back to the spring of 2011 setup and pretend that nothing has happened since...



    Joke of a business...
  • nagrommenagromme Posts: 2,834member
    Quote:
    Originally Posted by cajun View Post


    I think you have several services now that will be roughly the same in terms of content quality -- Netflix, Hulu Plus, and Amazon Prime. Some newer titles, tons of older titles. It really depends on which service's content set most closely matches your interests. The only thing Netflix doesn't offer yet is a pay-per-view model, but you can supplement that with Blockbuster's website.



    The selection at Netflix by DVD is untouchable, and for streaming, I can only compare Hulu: Netfilx is far better! And remember: Netflix streaming has no ads! Hulu Plus still has ads, last I checked! Yikes.



    Crackle is worth noting, too: it?s free like Hulu, but allows you to watch on iPhone and iPad, which free Hulu does not.



    (Pay-per-DVD Netflix by mail is what I want! That would nicely complement the online services I use?mainly iTunes, Hulu and Crackle. Plenty of stuff is on disc that just can?t be had legally online anywhere.)
  • mjuchtermjuchter Posts: 20member
    Because I was really upset over the name change/split... Riiiiight.



    I think we were protesting the price hike, Netflix. LOL
  • foxhunter101foxhunter101 Posts: 113member
    Reed Hastings must be a f___ing idiot!!! Ok, so last November (2010), Netflix has a price hike. I bit the bullit and paid the price hike. Less than a year later (July 2011, I think) they announce a 60% price hike (and spliting the company...Netflix & Qwikster). Now Reed has come to his senses an recinded split. It's time Reed came to realize that losing over a million subscribers over a 60% price hike (when they just had a price hike less than a year ago), isn't such a good idea either!!!

    Isn't it better to have a lot of money coming in from a lot of subscribers at a reduced price than having less money coming in from a much reduced subscriber base at a higher price? I don't know their numbers but, jesus, they just hiked the price last November. The recent price increase is a 'bonehead' move Reed, recind that too and I (and millions more) will rejoin!!!!!
  • digitalclipsdigitalclips Posts: 15,569member
    Quote:
    Originally Posted by mstone View Post


    It must be the movie studios that are screwing things up because their selection of DVDs is much better than their streaming selection. Not sure why that is.



    Exactly. If their DVD selections were also available streamed it would be pretty awesome. I love that it is built into Apple TV too unlike alternatives.
  • kingofsomewherehotkingofsomewherehot Posts: 3,999member
    Quote:
    Originally Posted by gmcalpin View Post


    ... whether their customers like it or not.




    ... Because, god knows, they certainly don't need those pesky customers around!... Their business would probably be more profitable if they could get rid of the costumers completely!
  • prof. peabodyprof. peabody Posts: 2,860member
    Quote:
    Originally Posted by AppleInsider View Post


    Responding to customer backlash, Netflix on Monday announced that it will no longer spin off its DVD-by-mail business as a new operation dubbed Qwikster. ...



    This seems like a colossally bad move to me.



    "Customer Revolts" rarely amount to anything and are mostly just talk. It's usually a very bad idea to ever go back on a business decision like this as it telegraphs that you made a mistake in the first place and doesn't generally ameliorate the feelings of the clientele anyway.



    This is probably more to do with the new Blockbuster competition that anything else. That's the only substantial change in market conditions since the decision was first made.
  • johnwhite1000johnwhite1000 Posts: 75member
    Quote:
    Originally Posted by cajun View Post


    I think you have several services now that will be roughly the same in terms of content quality -- Netflix, Hulu Plus, and Amazon Prime. Some newer titles, tons of older titles. It really depends on which service's content set most closely matches your interests. The only thing Netflix doesn't offer yet is a pay-per-view model, but you can supplement that with Blockbuster's website.





    Hulu Plus is not even in the same league. Horrible huge number of ads as of the last few weeks. And yet they still have the gall to charge 7.99 a month for that crap. I guesss one should have expected it though since it another Murdock/Fox operation.
  • gwmacgwmac Posts: 1,795member
    Netflix could be a lot better, but at the moment it offers the most bang for your buck. Hulu+ makes you pay and then also includes commercials. Most other similar sites don't offer an all you can watch monthly buffet like Netflix either and other streaming sites are very expensive for just one movie.



    True, Netflix does have a lot of older and B movies, but they also have a lot of hidden gems and also enough newer movies to keep me interested. I especially like all the TV series, mini-series and documentaries as well. A few series I enjoyed were Spartacus seasons 1&2, Torchwood, the Kennedy's, Madmen, Nick Swardson, Damages, Strangers With Candy, Drawn Together just to name a few. I can't even begin to list how many good movies I have watched.



    If the damn movie studios weren't so greedy I am sure Netflix would have a lot larger and newer catalog. If you can rent movies from Redbox for $1, why can't they offer that same price for streaming? But Vudu charges from $5 to $8 to rent just one movie. That is the price for an entire month on Netflix. I hope Netflix can add a pay per view feature for newer movies and use the Redbox model of $1 per title.
  • thinkpeoplethinkpeople Posts: 18member
    Quote:
    Originally Posted by digitalclips View Post


    Exactly. If their DVD selections were also available streamed it would be pretty awesome. I love that it is built into Apple TV too unlike alternatives.



    Apple will acquire Netflix to provide a complete viewing package, and sell more Apple TVs. Apple to offer $10 billion for the deal; it will be 50% over NFLX's value. Great deal for all parties.
  • gmcalpingmcalpin Posts: 266member
    Quote:
    Originally Posted by KingOfSomewhereHot View Post


    ... Because, god knows, they certainly don't need those pesky customers around!... Their business would probably be more profitable if they could get rid of the costumers completely!



    This is what I was saying:



    "It’s not the consumers’ job to figure out what they want." — Steve Jobs



    If they really could make streaming better by spinning off the DVD service (and depending on their contracts for their movies and TV shows, it's certainly possible), they should have done it. Pissing off a handful of people to truly make the service better sometimes makes sense as part of a long term game. You don't abandon a smart long term gameplan to stave off short term losses. You follow through.



    None of this is to say I thought splitting the services WAS a smart long term gameplan, but if they were convinced of it, they should have stuck to it.
  • suddenly newtonsuddenly newton Posts: 13,115member
    Well, good. You don't see Apple spinning off its hardware business just because iTunes Music Store is taking off.
  • pendergastpendergast Posts: 1,358member
    Quote:
    Originally Posted by mstone View Post


    It must be the movie studios that are screwing things up because their selection of DVDs is much better than their streaming selection. Not sure why that is.



    It is the studios. The rights holders don't want progress, because it messes with their status quo where they make a boat load of money. They're afraid of Netflix. They're afraid of change.



    It's the same reason they fight the cable companies who want to allow you to watch the service you pay for on your iPad.
  • neverindoubtneverindoubt Posts: 19member
    If anyone hasn't seen the Saturday Night Live mocking of the Netflix decisions (prior to this one) now seems to be a good time to watch it.



    Reality closes in on satire, indeed.



    http://tvbythenumbers.zap2it.com/201...-video/105687/
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