Change coming to Netflix again.

[caryrae]

Sounds like they are going to have to different websites for the DVD service and the streaming service now. The streaming will still be netflix and the DVD will be called Qwikster, which will now offer a video game rental upgrade now. Here is the letter I got and I am sure others with netflix got as well.



Dear Member,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

[SBETigg]

They say it will cost the same to have both services as it does to have the one service now, but I have doubts. Not loving Netflix lately. I think they are losing fans instead of gaining traction.

[DizneyRox]

Yeah, something tells me we're going to be witness to another company imploding on itself...

I haven't used NetFlix (or Qwikster) and probably never will, but they seem to be making a lot of news lately. None of it appears to be going over well from an outsiders perspective.

[BrerGnat]

They say it will cost the same to have both services as it does to have the one service now, but I have doubts. Not loving Netflix lately. I think they are losing fans instead of gaining traction.

I think they mean the price will not change from the NEW pricing plan they just rolled out. So, if you're paying $16/month now for dvd + streaming (for example), you will still pay $16 once they split, but the charge will be divided into its component parts and you'll see two charges on your credit card statement.

What I want to know is, why can they stream some movies/tv shows and not others? How come every new movie available on dvd is not available for streaming? Anyone know. This annoys me.

[DizneyFreak2002]

They have lost 2 million subscribers already... They are about to lose a partnership with STARZ, that means bye bye Disney movies from the streaming service as well as made for TV shows from STARZ... I'm keeping both services at the moment because I have plenty to watch from the streaming side (mostly old TV shows like X Files)... But if the service becomes crummy, and I have a feeling it will, I'll cancel the streaming account...

[caryrae]

I think I am one of the minority people who don't do much streaming. I did the Netflix dvd only service because I like to watch the new releases that streaming doesn't have. Now I decided to switch to Blockbuster by mail. They are a couple bucks more a month then Netflix but the price includes blu-ray and video game rentals and with some of the movies I had in my netflix queue blockbuster has then available now or will about a month sooner.

[MNNHFLTX]

I've been a big fan of Netflix. I was not a big fan of the price increase, but decided to stick with the service because of the ease of use and convenience. So now they are compounding their "mess-up" by dividing it into two services?? Which means two websites to be registered on, two queues to manage, two credit card entries for customers who will use both service. Wonder what brainiac thought this one up. :shakehead:

BTW, I never received this email and have been a Netflix subscriber for six years.

Oh, and I think Qwikster is a stupid name (okay, I'm done venting now).

[TheDuckRocks]

BTW, I never received this email and have been a Netflix subscriber for six years.

It maybe in your junk mail box as the sender was listed as Reed Hastings. I would have automatically deleted it but my daughter mentioned "the new not a very nice word from Netflix", so I was looking for it.

[SBETigg]

I've been a big fan of Netflix. I was not a big fan of the price increase, but decided to stick with the service because of the ease of use and convenience. So now they are compounding their "mess-up" by dividing it into two services?? Which means two websites to be registered on, two queues to manage, two credit card entries for customers who will use both service. Wonder what brainiac thought this one up. :shakehead:

BTW, I never received this email and have been a Netflix subscriber for six years.

Oh, and I think Qwikster is a stupid name (okay, I'm done venting now).

I'm with you on all counts! And I also didn't get the memo (but my husband might have, could be that one is in his name).

[MNNHFLTX]

It maybe in your junk mail box as the sender was listed as Reed Hastings. I would have automatically deleted it but my daughter mentioned "the new not a very nice word from Netflix", so I was looking for it.
Nope, I checked my spam folder and had heard about the changes on the news last night, so definitely was looking for the email this morning. Very strange.

[Melanie]

Nope, I checked my spam folder and had heard about the changes on the news last night, so definitely was looking for the email this morning. Very strange.

Mine was there when I woke up this morning.

I think I'm going to check into the offerings of some other services. What is offered is very important to me, since I use Netflix for a very specific reason.

And Beth, totally agree on Qwikster name. Sounds like Napster. :shake: And it's crazy they have to separate the websites, billing, etc. Waaaaaay to much trouble.

[Ian]

What I want to know is, why can they stream some movies/tv shows and not others? How come every new movie available on dvd is not available for streaming? Anyone know. This annoys me.Because for some bizarre reason the content providers make them negotate streaming rates separately from DVD rates. It's annoying and has a lot more to do with the content owners than it does Netflix.

I still think $16 a month for essentially unlimited access to movies and T.V. shows is a good deal. It probably isn't, but it feels that way to me so I don't complain. I find more than enough to watch in a given month to feel that I got $16 worth.

[DizneyRox]

I still think $16 a month for essentially unlimited access to movies and T.V. shows is a good deal. It probably isn't, but it feels that way to me so I don't complain. I find more than enough to watch in a given month to feel that I got $16 worth.
The problem is everything is going up more than salaries. I do think $16 is too much, especially when alternatives are cheaper, way cheaper.

But it must be making someone money, and costing others profit, otherwise ISPs wouldn't be throttling/capping traffic.

[SBETigg]

I just read a business analysis of the move. Experts say that the separation is most likely due to Netflix wanting to go all streaming and eventually sell or dump the business involving physical dvds, which they seem less interested in carrying. So the Qwikster might not be affiliated with Netflix for long.

[TheVBs]

Got the email this morning too. We've loved using Netflix. No one loves a price hike, but it was still far cheaper than the cable subscription we cancelled. So, we weren't too bothered by the price increase.

However, now they're taking away convenience and that's more of a sticking point for me. The lists won't cross reference, so you'll have to search both sites. Not exactly a crisis, I know, but still less convenient.

I could not imagine why they would separate the services like that, but after reading SBETigg's last comment it's the only thing that makes sense. And yet, it doesn't! Unless their content can offer more current, and new release movies the streaming business just can't stand on it's own! Just seems to me like they're shooting themselves in the foot. I haven't looked into other companies, but there must be others that are streaming current content?

[Capt_redshirt]

What I want to know is, why can they stream some movies/tv shows and not others? How come every new movie available on dvd is not available for streaming? Anyone know. This annoys me.

The movie companies would prefer that you buy there movies instead of renting or streaming. So to do this they require netflix to wait a min of 2 weeks (Disney requires 28 days if i recall correctly.) Streaming takes a little longer then that cause there are bigger permission issues.

[DizneyRox]

The movie companies would prefer that you buy there movies instead of renting or streaming. So to do this they require netflix to wait a min of 2 weeks (Disney requires 28 days if i recall correctly.) Streaming takes a little longer then that cause there are bigger permission issues.
And the kicker is, the illegal methods of obtaining the same movies will get you the movie much faster. You mention Disney... I've seen 3D versions of Lion King out on the net going back probably a month now. 3D Bluray versions! When does it hit the theaters?

Limiting access isn't the answer, yet the movie studios fail to accept their business is changing.

[BrerGnat]

Limiting access isn't the answer, yet the movie studios fail to accept their business is changing.

I agree. Just like the Napster/Music Studios war of yesteryear. They will eventually cave, and begin offering their stuff digitally, and for cheaper. I mean, I have a LOT of DVD's. So many, in fact, that I don't want to buy any more. Ever. It's time to do away with the physical discs and adopt something similar to iTunes for movies...

[DizneyRox]

Actually, the medium doesn't bother me... I don't care how it's offered, I just want it on my terms. I don't want to spend a ton of money to sit in a theater with sticky floors, overpriced junk food and 1/2 the theater texting and yammering on their cell phones.

Give it to me in my house when I want to watch it. Disc, USB drive, maybe streaming as long as it doesn't impact my Internet caps, whatever...

[Melanie]

Wow, change of heart from Netflix....


Netflix Abandons Plan to Rent DVDs on Qwikster

By BRIAN STELTER/New York Times
8:41 a.m. | Updated

Abandoning a break-up plan it announced last month, Netflix said Monday morning that it had decided to keep its DVD-by-mail and online streaming services together under one name and one Web site.

The company admitted that it had moved too fast when it tried to spin-off the old-fashioned DVD service into a new company called Qwikster.

“We underestimated the appeal of the single web site and a single service,” Steve Swasey, a Netflix spokesman, said in a telephone interview. He quickly added: “We greatly underestimated it.”

Mr. Swasey said that the Netflix chief executive Reed Hastings declined an interview request. But in a statement, Mr. Hastings said, “Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”

Mr. Swasey declined to comment on any involvement by the Netflix board in the decision to keep the two services together. Initial reaction to the Netflix announcement was largely positive, and the company’s stock jumped 10 percent in pre-market trading.

Netflix said it never actually separated the services or started Qwikster. But the Sept. 18 announcement that it intended to do so stoked anger among Netflix customers, some of whom were already incensed by a price hike to $16 from $10 for those who receive both DVDs and streaming. (That increase will remain in place.)

In a blog post that day about the plan, Mr. Hastings wrote, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.” His implication was that Netflix had to act aggressively to expand its fast-growing streaming service by severing its older, slower DVD-by-mail arm.

In a sentence that now seems like a bit of foreshadowing, Mr. Hastings also wrote, “It is possible we are moving too fast – it is hard to say.”

Netflix said that day that the separation would take effect in a few weeks. But tens of thousands spoke out against the plan on Netflix’s Web site and others, and Netflix stock slid sharply.

Three days after the announcement, Mr. Hastings wrote in a Facebook status update, “In Wyoming with 10 investors at a ranch/retreat. I think I might need a food taster. I can hardly blame them.”

The planned break-up was rooted in Mr. Hastings’ and Netflix’s belief that DVDs and online streams have different cost structures and different consumer demographics.

In July, to address the structural underpinnings of the business, Netflix announced that it would start charging $8 a month for both its streaming service and its DVD service, a total of $16 a month for the combination.

Previously, DVDs were a $2 add-on to the $8 streaming service. Of course, subscribers who only wanted one service or the other — most new subscribers only want the online streams — saw no price hike, but that fact was drowned out by the outcry.

Netflix expected some of its 25 million subscribers to cancel in the wake of the price change, but the cancellation rate exceeded expectations. The company said in mid-September that it expected to report a quarterly decline of about one million in the third quarter, which ended on Sept. 30.

But that guidance was given before the break-up was announced; Mr. Swasey said Netflix would not comment on whether the quarterly losses would exceed the already-lowered expectations. The company will report earnings and subscriber figures on Oct. 24.

On Sunday night, Mr. Swasey sought to reiterate what Mr. Hastings tried to say last month when he announced Qwikster: that Netflix had failed to communicate effectively about the price changes. “We had to look at the reality of what it cost” to mail multiple DVDs to households each month, Mr. Swasey said, noting that the round-trip postage alone for one DVD cost almost $1.

Under the plan announced on Monday, the price change will remain in effect, but the two services will not be untethered. That means that subscribers who want both online streams and DVDs won’t have to manage two accounts and pay two bills each month, after all.

Netflix tried to be crystal-clear about it, issuing a press release that was titled “DVDs Will Be Staying At Netflix.com” and sending e-mails to subscribers about the news.

“Netflix said in a Sept. 18 blog post that its DVD by mail service would operate at Qwikster.com,” the press release read. “Instead, U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand.”

A plan for Qwikster to rent video games may or may not move forward; Mr. Swasey said it was “to be determined.”

Netflix, meanwhile, still has to concentrate on its online streaming service, which is widely considered to be its core business.

Next February, it is expected to lose the right to stream films from Walt Disney Studios and Sony Pictures Entertainment as a result of a failed renegotiation with the premium cable channel Starz. But it announced a deal last month with DreamWorks Animation to stream that studio’s films starting in 2013. Last week, it announced a deal with AMC Networks to stream old episodes of TV shows like “The Walking Dead.”

Netflix also remains interested in paying for the production of new TV shows. Earlier this year it ordered its first original drama, “House of Cards,” which is expected to have its premiere in late 2012. Now it is in talks to distribute new episodes of two cancelled TV series, “Arrested Development,” formerly of the Fox network, and “Reno 911,” formerly of Comedy Central. The past seasons of both shows can be streamed via Netflix — and can be rented on DVD, too.

[DizneyRox]

Ultimately they come off looking like a joke.

Disney said years ago, they wanted to wean people off discounts, and they haven't. Instead they went an announced free dining for most of the next year. So, nobody believes what they are saying and everything just keeps on going.

Disney has yet to remove the discounting they want to get away from. One might consider the insane price hikes of late as a way of doing that, but i don't know...

[MNNHFLTX]

Disney said years ago, they wanted to wean people off discounts, and they haven't. Instead they went an announced free dining for most of the next year. So, nobody believes what they are saying and everything just keeps on going.

Disney has yet to remove the discounting they want to get away from. One might consider the insane price hikes of late as a way of doing that, but i don't know...
:confused::confused:

As far as Netflix, it's been one bumbling move after another. Haven't they ever heard of doing a little market research before making these type of sweeping changes? :shake:

[brivers222]

I actually don't miss them... i have been gone since july when i got the email that in sept they would be raising my rates... I didn't want to give them any more money after that letter.

[DizneyRox]

:confused::confused:

As far as Netflix, it's been one bumbling move after another. Haven't they ever heard of doing a little market research before making these type of sweeping changes? :shake:
My point was, nobody will believe what they are saying when they flip flop back and forth.