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Goodby Qwickster - Netflix Reconsiders

mzpro5

Well-Known Member
Famous
Gee I must be special 'cause Reed Hastings CEO of NF sent me an email and here it is:

Dear Jeffrey,

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

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.


Yeah Reed? - but where is my free stuff that usually comes with an apology like this?
 

Huey

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

Something like this, is usually the beginning of the end for a company. I don't see them going away any time soon, but this move only confuses the market.
 

mzpro5

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

I kinda thought the same thing Huey. Here is an interesting article about the change:

Netflix: What We've Got Here Is A Failure To Communicate

"That's quite the convoluted offering, especially considering how customers just learned of their new tiered subsciption plans: streaming for $7.99 per month, DVDs by mail for $7.99, both for $15.98, or more depending on the amount of DVDs out at one time. Now Netflix is trying to educate its members about a new, disconnected service, under a different brand name--and telling them to pay for it separately. In other words, Netflix is trying to communicate what it couldn't communicate correctly before--because it was too complicated--by introducing more complications."

Looks like they totally blew the business model projection.
 

mzpro5

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

It appears the attempt to mollify dissatisfaction with NF is not exactly working as planned.

Netflix CEO's apology brings new backlash

Excerpts from the article:

The attempt to rectify customer communications might have fared better had Hastings begun his commentary with a line he actually buried deep within the comments:

"By separating the services and charging for both ($7.99) we can license more streaming content," Hastings said. "We are hungry for better streaming service."

Perhaps the company didn't want to look more vulnerable than the departure of Starz streaming video content already makes it look. But it's pretty clear that Hollywood holds a lot of power over Netflix, especially with services from Hulu, Google, Apple, and others undermining Netflix' early-mover advantage.

So why not provide a frank acknowledgement that streaming video content isn't easy to come by and that the price hikes are a necessary to ensure customers get a good supply? Netflix could have been more persuasive while perhaps redirecting some customer dissatisfaction toward the very content creators.


I think they are running out of feet to shoot.
 

Huey

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

The only thing I am surprised about, is that some of the other companies have not come forward with alternatives. Netflix is handing customers to competitors on silver platters.
 

Towen7

Well-Known Member
Staff member
Moderator
Re: Hello Qwickster - Netflix Splits Into Two Services

Alternatives to DVD rentals? Like RedBox (the only viable service), Block Buster, and mom-pop video rental companies...

Or

Alternatives to streaming service? Like Hulu, VOD, Apple TV, Xbox live, Crackle, VooDoo ...
 

Huey

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

Streaming, and by alternatives, I mean bigger libraries. Obviously, streaming seems to be the most important to Netflix, and I am surprised Amazon has not taken advantage of the situation.
 

Barney

Longhorns, Cowboys, Spurs, & Rangers...love Texas
Netflex/Qwickster Changes (Gamers too!)

Got an email from Netflex....some changes coming:


Dear Jerry,

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

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.
Here is Netflex blog:
http://blog.netflix.com/2011/09/explana ... etflixBlog
 

mzpro5

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

Towen7 said:
Alternatives to DVD rentals? Like RedBox (the only viable service), Block Buster, and mom-pop video rental companies...

Or

Alternatives to streaming service? Like Hulu, VOD, Apple TV, Xbox live, Crackle, VooDoo ...

If you are lucky enough to live in an area where a Family Video store is available they are THE option to check out. Their prices are reasonable 3.79/night (BD) for new releases. And after it is out for 6-8 weeks they become available for 5 night rentals at 3.99/ 5 nights. And they have older BD's for 1.00/ 5 nights.

You can also pay $10/month (on a month to month basis, no kind of contract) and every disc (BD, DVD and games) is half off for the 30 day period from when you pay the 10 bucks.

See if a Family Video is near you.
 

mzpro5

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

Huey said:
Streaming, and by alternatives, I mean bigger libraries. Obviously, streaming seems to be the most important to Netflix, and I am surprised Amazon has not taken advantage of the situation.

I wonder also.

I feel they actually have the better model - with older stuff free to stream for Prime members AND the ability to stream new releases at a per film rental price. If they would drop the BD price from 4.99 to 3.99 I would use it more.
 

mzpro5

Well-Known Member
Famous
Re: Netflex/Qwickster Changes (Gamers too!)

Same one I got and posted earlier Barn.
 

Barney

Longhorns, Cowboys, Spurs, & Rangers...love Texas
Re: Netflex/Qwickster Changes (Gamers too!)

Sorry Mods.........seems there is already a thread about this.......
whack my pee-pee
 

mzpro5

Well-Known Member
Famous
Re: Netflex/Qwickster Changes (Gamers too!)

Barney said:
Sorry Mods.........seems there is already a thread about this.......
whack my pee-pee

They gotta find it first. :teasing-neener:
 

Barney

Longhorns, Cowboys, Spurs, & Rangers...love Texas
Re: Hello Qwickster - Netflix Splits Into Two Services

Sorry, I posted the same email just now. Hope the Mods will move mine here.
On the news this morning it was noted that because of the new pricing, Netflex lost 1M subs. Thats alot of $$$$$ every month & their stocks dropped 19% (?).
I watched Reed Hastings talk about them loosing Starz.....he seems to think they have more than enough to offer & loosing Starz isn't that big of a deal........thats a big deal if you ask me....I like Disney, Sony pics, etc........
 

mzpro5

Well-Known Member
Famous
Re: Hello Qwickster - Netflix Splits Into Two Services

Barney said:
Sorry, I posted the same email just now. Hope the Mods will move mine here.
On the news this morning it was noted that because of the new pricing, Netflex lost 1M subs. Thats alot of $$$$$ every month & their stocks dropped 19% (?).
I watched Reed Hastings talk about them loosing Starz.....he seems to think they have more than enough to offer & loosing Starz isn't that big of a deal........thats a big deal if you ask me....I like Disney, Sony pics, etc........

When I called CS to complain when they lost Starz I got the same "we aren't really concerned about that" and she got really snippy when I replied "You may not be concerned but I bet your customers are"

Most people don't pay attention until things are gone and just losing all the Disney material alone will really piss off all those parents out there, not to mention those of us adults that like to watch a Disney flic now and again.
 

Towen7

Well-Known Member
Staff member
Moderator
Re: Hello Qwickster - Netflix Splits Into Two Services

Those libraries are expensive. NF offered Starz 10x what they paid under their last deal but Starz wanted to be paid per/subscriber... Just like they get from the cable companies.

Would you be willing to pay substantially more for your NF subscription to get the Starz content? Would everyone else? What Starz wanted would result in tiers pricing and multiple subscription plans, which is exactly the opposite of what makes NF so attractive to most.
 

Barney

Longhorns, Cowboys, Spurs, & Rangers...love Texas
Re: Hello Qwickster - Netflix Splits Into Two Services

mzpro5 said:
This may be the best article about the split/change I've read today.

Wired and Tired: The Long View on the New Netflix

Thanks, that was a very good read. Wonder about the news coming from...is it Netflex or Qwickster......now I'm getting confused....in the coming days......
Wonder what all the manufactors are thinking now that pay..is it Netflex or Qwickster....for the apps (again, is it Netflex or Qwickster)....to be included in their equipment...
 

Kazaam

Well-Known Member
Re: Hello Qwickster - Netflix Splits Into Two Services

Aside from the dumb name, I'm OK with the split.

"Qwikster, powered by Netflix".

They can add game rentals and compete with GameFly. But it could be a mistake if Netflix can't get better streaming content. I'm assuming they do, but if they continue to take steps back that will be bad. For me I am no longer interested in receiving a physical disc by mail. They just need to keep working on improving their streaming video and sound quality; and, of course, adding better content.

I'd be interested in a pay-per-stream option, too, like was mentioned earlier with regards to Amazon Prime's newer releases. Not that we don't already have that with Vudu, I suppose, but I just think it would be a nice option.
 
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