or Connect
AppleInsider › Forums › Mobile › iPod + iTunes + AppleTV › Netflix cancels plans to spin off disc mailing business as Qwikster
New Posts  All Forums:Forum Nav:

Netflix cancels plans to spin off disc mailing business as Qwikster

post #1 of 42
Thread Starter 
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.
post #2 of 42
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?
post #3 of 42
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.
post #4 of 42
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...
post #5 of 42
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.)
Multiplex is an online comic strip about the staff of a movie theater.
Reply
Multiplex is an online comic strip about the staff of a movie theater.
Reply
post #6 of 42
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.
post #7 of 42
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.

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #8 of 42
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...
post #9 of 42
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: its 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 usemainly iTunes, Hulu and Crackle. Plenty of stuff is on disc that just cant be had legally online anywhere.)
post #10 of 42
Because I was really upset over the name change/split... Riiiiight.

I think we were protesting the price hike, Netflix. LOL
post #11 of 42
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!!!!!
post #12 of 42
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.
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
From Apple ][ - to new Mac Pro I've used them all.
Long on AAPL so biased
"Google doesn't sell you anything, they just sell you!"
Reply
post #13 of 42
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!
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
Reply
From out there on the moon, international politics look so petty. You want to grab a politician by the scruff of the neck and drag him a quarter of a million miles out and say, "Look at that!" -...
Reply
post #14 of 42
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.
post #15 of 42
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.
post #16 of 42
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.
post #17 of 42
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.
Multiplex is an online comic strip about the staff of a movie theater.
Reply
Multiplex is an online comic strip about the staff of a movie theater.
Reply
post #18 of 42
Well, good. You don't see Apple spinning off its hardware business just because iTunes Music Store is taking off.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #19 of 42
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.
post #20 of 42
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/
post #21 of 42
I'll bet that he discovered that 'Qwikster' (or close variant) was taken.

Possibly making a virtue out of a necessity!
post #22 of 42
Quote:
Originally Posted by mjuchter View Post

Because I was really upset over the name change/split... Riiiiight.

I think we were protesting the price hike, Netflix. LOL

I was certainly upset about the split, having to have two different accounts with two different queues. Made no sense at all unless their plan was to intentionally kill the DVD side.

I just want to search for a movie - if it's available for streaming I'll queue it, if not I'll queue the disk. Besides upping their streaming content, they need to make major improvements to that app - horrible recommendations, and they desperately need to allow saving content if it becomes available on the streaming side, specifically from the mobile/tv app.


Quote:
Originally Posted by Prof. Peabody View Post

"Customer Revolts" rarely amount to anything and are mostly just talk.

Except in this case Netflix has lost a lot of customers and admitted they're having a much harder time getting more. Splitting was a horrible decision and reversing it IS a good one although reversing like this does make them look like fools. They should have had more of a clue and not announced a split in the first place.

Quote:
Originally Posted by gwmac View Post

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.

Not gonna happen. Renting out discs and streaming are entirely different and have different rights from the studios. Anyone can buy a DVD and rent it out to other people without paying the studio anything else. The studio has no power in that situation. But with unlimited streaming or streamed rentals, the studio can ask for whatever terms they want. It would be fantastic if NF could just stream everything they offer on DVD but the legal situation makes that impossible.
post #23 of 42
Almost any TV show can be found on the internet if you do a search. There are several video sources that aggregate the latest season's shows and offer them for streaming. Type the title of the show, then Season number and episode number. Many will pop up.

If you use Windoz you're more likely to get a virus from one of these sources. My Vista computer did a year ago. That is when I dual booted with Linux for the first time. It was a great decision. I rarely need to use Windoz these days.

The quality of Netflix streaming is not very good on most videos. Some are better but none of them compare to a DVD. They need to fix that.
post #24 of 42
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.

Maybe. Or maybe it's just that the economics are different. If you select a DVD, it's 3 days before you can get another one if you have the single disk plan (1 day to ship to you, one day to ship back, and one day before the next arrives. So it would be hard to watch more than 10 a month.

OTOH, if you're doing streaming, it's not hard to to 10 a WEEK. Since you're paying a fixed monthly cost, and assuming that the new releases cost Netflix more than old ones, then it might be Netflix who is discouraging new releases by streaming.

Just guessing, though.

Quote:
Originally Posted by gmcalpin View Post

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.)

I don't think that's necessarily the case (that the CEO is an idiot). Look at the New Coke "fiasco". Even after extensive market research and testing, it is possible for companies to make a mistake. One sign of a mature CEO is his willingness to admit a mistake and then fix it.

Quote:
Originally Posted by foxhunter101 View Post

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!!!!!

It doesn't work that way. At some point, the costs are so high and the revenues so low that you can't afford to keep adding new customers.

If the studios are charging Netflix more per customer than Netflix receives from the customer, then adding more customers will not fix the problem. The only solution is either getting the studios to take less money or else raise prices.
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
Reply
post #25 of 42
We lose Steve Jobs and we're left with incompetent buffoons like Reed Hastings; I weep.
post #26 of 42
All This back and forth. If netflix is a public company their shareholders should be screaming bloody murder. They're acting like they're grabbing for life lines.
post #27 of 42
Quote:
Originally Posted by gwmac View Post

.....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? ....

NetFlix buys all the DVDs outright. Copyright law says NetFlix can loan/rent those original disc out however and as many times as they want. The royalty fees are included in the purchase price of each DVD forever.

Streaming in the other hand is a "whoa buddy" discussion w the studios -- must be negotiated. Then re-negotiated. Then....
post #28 of 42
Quote:
Originally Posted by Pendergast View Post

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.

I agree. Will be interesting to see if video media co's will find a way to give paying customers what they want at a fair price, or if they take the music media path and wait until rampant piracy destroys their profits to the point where they have little other choice.
post #29 of 42
After the 60% increase I was going to cancel even if they hadn't split the DVD business because I'm tired of not being able to stream a lot of 8 & 10 yr. old movies. All you people that signed up again should have asked when is the streaming catalog going to be increased by 50% & are we going to get a discount if they lose "Starz" & "Disnney".
post #30 of 42
Quote:
Originally Posted by markbyrn View Post

We lose Steve Jobs and we're left with incompetent buffoons like Reed Hastings; I weep.

Indeed. I mean "Quickster?" While it's only a name, etc. how could they name it that? Are they stuck in the late 90's or something.

Just a bout anything would be better
Netflix Classic
PostFlix
MailFlix
etc. etc.
"Quickster!?" When I heard it I though it was some kind of joke.

Seeing recent moves of Google, Samsung, NetFlix, HP, Microsoft, etc. etc. it is all to apparent that the world is going to be woefully less interesting, fun, and inspiring without Steve around to keep raising the bar. I hope he's been grooming along lots of smart talented people at Apple.
post #31 of 42
Quote:
Originally Posted by jragosta View Post

Maybe. Or maybe it's just that the economics are different. If you select a DVD, it's 3 days before you can get another one if you have the single disk plan (1 day to ship to you, one day to ship back, and one day before the next arrives. So it would be hard to watch more than 10 a month.

With my schedule, it is difficult to find the time to watch even 5 movies a month. And with the streaming selection they offer, I can't even watch 1 a month because there is nothing I would waste my time on.

Life is too short to drink bad coffee.

Reply

Life is too short to drink bad coffee.

Reply
post #32 of 42
If its not broken don't fix it.

Netflix is fine the way it is. If its not available for streaming, I'll just wait 1-3 days. No big deal.
post #33 of 42
Quote:
Originally Posted by foxhunter101 View Post

...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!!!!!

Actually, no. I think they had 25 million subscribers before they announced the price hike, and after the hike, they were down to 24 million. Let's say that's 25 million at $10 each vs 24 million at $16 each. That would be $250 million a month vs $384 million a month, so this "bonehead' move made the company approximately $134 million more per month.

This is a gross oversimplification, and I'm sure that the numbers don't exactly shake out like this with a multitude of tiered plans, etc, but the point is that losing a million subscribers is clearly worth it if you're able to charge the remaining 24 million substantially more.

Saying all that, I'm one of the million subscribers who canceled when they announced the price hike; I was happy with the service at the price I was originally paying, but when they tried to jack it up by 60%, it no longer provided me with enough value for the money. I do think that the way Hastings handled the whole situation was a textbook example of bad marketing / customer relations, and he's screwed up on virtually every customer communication related to this situation, so if you want to call him a bonehead for that, I'd agree with you. But jacking the price of your service by 60% and losing less than 5% of your subscriber base isn't bad business.
post #34 of 42
Quote:
Originally Posted by codog24 View Post

Actually, no. I think they had 25 million subscribers before they announced the price hike, and after the hike, they were down to 24 million. Let's say that's 25 million at $10 each vs 24 million at $16 each. That would be $250 million a month vs $384 million a month, so this "bonehead' move made the company approximately $134 million more per month.

But that's assuming ALL the customers who stay keep the DVD *and* streaming parts. Not only may they have lost a million customers, but many stayed but dumped either the streaming or the DVD side. With any of those customers they're making less money than before.

And you're also assuming that the million they lost right away is the end of it. More likely there are lots of customers who used to be happy who are currently looking at NF's competition and are planning to switch once they decide what to do instead (or may keep an eye on the other options and switch once someone else improves enough) - these are people who otherwise might have stayed with NF indefinitely and never even looked at other options. I know I never even investigated them until the price hike and other related fiascos.
post #35 of 42
People have accused me of being a neo-luddite when it comes to still using spinning discs, and even I don't see the value of Netflix' DVD-by-mail service anymore.

It combines two obsolete delivery systems in one package. I love my Netfix account, the whole family watches it far more than cable, but it's never once occurred to me that I'd like the movies delivered on disc by mail.
post #36 of 42
The most damage was jacking up the price so much at one time. I thought that was excessive and immediately cancelled my service. As for splitting put he services I thought it was a terrible idea and I'm glad they decided to keep it together. The reason to split for the more orderly tracking of revenue by online and DVD services was ridiculous. If they can't already track that by how many people click play vs ship me the DVD then heaven help them.

I think most people would agree the current leadership is concerning. Clearly they do not have the right guy in charge.
post #37 of 42
Quote:
Originally Posted by radwansk View Post

The most damage was jacking up the price so much at one time. I thought that was excessive and immediately cancelled my service.

They raised the price? My rates have not changed. I'm paying $8/mo. How much was it before?
post #38 of 42
Quote:
Originally Posted by KingOfSomewhereHot View Post

Their business would probably be more profitable if they could get rid of the costumers completely!

Fewer people wearing funny clothes would be an improvement.

Quote:
Originally Posted by bsenka View Post

People have accused me of being a neo-luddite when it comes to still using spinning discs, and even I don't see the value of Netflix' DVD-by-mail service anymore.

It combines two obsolete delivery systems in one package. I love my Netfix account, the whole family watches it far more than cable, but it's never once occurred to me that I'd like the movies delivered on disc by mail.

Depends on what you watch and if you care about video quality. The streaming catalog for older films is very weak. If you're into classic movies even a little, you're not going to be satisfied with Netflix streaming. Also, the video quality the few times I tried to use streaming was simply horrible -- compressed to the point of being unwatchable, and to make matters worse, widescreen movies were cropped. Not worth paying anything for, IMO.

Quote:
Originally Posted by bsenka View Post

They raised the price? My rates have not changed. I'm paying $8/mo. How much was it before?

If you signed up for the DVD-only service to start you won't see the increase. It was the customers who had the $1 streaming add-on who saw their subscription price increase by 60%.
Please don't be insane.
Reply
Please don't be insane.
Reply
post #39 of 42
Quote:
Originally Posted by Dr Millmoss View Post

If you signed up for the DVD-only service to start you won't see the increase. It was the customers who had the $1 streaming add-on who saw their subscription price increase by 60%.

I've always had the streaming service, price has not changed.
post #40 of 42
Quote:
Originally Posted by bsenka View Post

I've always had the streaming service, price has not changed.

Beats me then. Keep an eye on your bill.
Please don't be insane.
Reply
Please don't be insane.
Reply
New Posts  All Forums:Forum Nav:
  Return Home
  Back to Forum: iPod + iTunes + AppleTV
AppleInsider › Forums › Mobile › iPod + iTunes + AppleTV › Netflix cancels plans to spin off disc mailing business as Qwikster