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A Lesson in Humility

Netflix On Its New Plan: We Don’t Want to Be Borders

by Jamie Frevele | 1:59 pm, September 19th, 2011


So, fellow Netflix subscribers (or what’s left of you, since a million of you have dropped the service): Did you receive an email this morning from the company’s co-founder and CEO Reed Hastings, saying “I messed up”? And then a lengthy explanation as to what’s going to happen to its DVD service, about how it’s going to be completely dropped from Netflix and turned into a new service called Qwikster, but swearing that there will be no further changes in cost? I got that email too! It was like being in a relationship with someone, then suddenly being told “I’m going to let you pay for all of our dates now, is that cool? Because I’m going to spend my money on inventions instead, but you’ll love those inventions I’m going to invent, I promise,” and then the next morning you get a text saying, “I messed up.” And now, they’re all worried that someone else is going to come up with that invention first, or maybe they already have, and now they just want us back as their girlfriend/customer for moral support (and money), but all they’re really going to do is tell us how pretty we are … I’m sorry, am I the only one who has dated a hypothetical inventor? Anyway, let’s talk about Netflix now. It’s changing again, but not the prices. They promise.

Netflix has been going through a transition, much like puberty — it’s unpleasant and uncomfortable for everyone, and it makes Netflix look kinda gross, all in an attempt to become a bigger, better company. After they announced that they were separating their their streaming and DVD services, causing 60 percent price hikes for users who still wanted to maintain both, about a million people dropped their subscriptions and last week, their stock plummeted 8.31 percent. Not a cool time to be Netflix, to say the least.

But now, in an email sent to those of us who are still subscribing (the content of which appears on the Netflix blog), Hastings explains that in order to keep up with progress and remain a part of the future of streaming video, Netflix will become an all-streaming service and work to expand its offerings while the DVD delivery service will be broken off completely and become a new service called Qwikster. Where you currently find both of your DVD and Instant queues, you will now only see the latter. Qwikster will be its own web site with its own username and password — again, a completely separate service. They will not be integrated.

However, the pricing will not change. You will see two separate payments, but the prices you signed up for when the rates changed will remain exactly the same. This is a promise by Reed Hastings. And a new change that people actually will like is that video games — for Wii, PS3 and Xbox 360 — will be added to the Qwikster service, becoming an added option (and fee) similar to how the Blu-ray option worked on Netflix, an upgrade. Hastings does not include a price on that, and as of this writing, Qwikster.com has yet to launch. (But for reference, the Blu-ray upgrade was around $2.)

And why is this all happening? Yes, streaming is the future and even in the present, it’s much more convenient. However, Netflix’s current streaming offerings are not as impressive as their DVD library. (Just one example is Doctor Who — guess how fun it was to try watching David Tennant‘s final specials on streaming, only to discover that one of them was only available on DVD.) But this is what they’re investing in. (Even though Starz is not really interested.) Hastings specifically cites Borders bookstores and AOL dial-up as the reasons Netflix is going exclusively streaming — two companies that were pioneers in their respective fields, only to fall behind and eventually fail when they couldn’t keep up with progress. By separating the two businesses, Hastings says that Netflix can try to focus on providing the best streaming and Qwikster can focus on providing the best DVD delivery. But that way, when DVDs go the way of the dodo, as many believe they will, Netflix won’t have to go extinct with them.

You can read Hastings’ entire statement at the Netflix blog, perhaps leave your unsatisfied comments along with the over 100,000 others who already have today.

(via Netflix)

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  • Anonymous

    Why is everybody blaming Netflix? Shouldn’t we blaming the content providers that doesn’t want their content to compete with their cable partners (unless we let NBC merge with Comcast which they won’t let one division compete with another)? Shouldn’t we blame the same people that refuse to see where customer demand is going (instant streaming)?

  • Anonymous

    ,.. awesomee ..
    I just got a $827.89 iPad2 for only $103.37 and my mom got a $1499.99 HTV for only $251.92, they are both coming tomorrow. I would be an idiot to ever pay full retail prîces at places like Walmart or Bestbuy. I sold a 37″ HTV to my boss for $600 that I only paid $78.24 for.
    I use http://alturl.com/5ag59

  • Francesca M

    Honestly I don’t have a problem with the price increase. I had a problem with how they handled it. They could have done it a couple different ways. Honestly the amount I pay each month for every freaking dvd ever is not a problem. I didn’t drop them then, all I did was opt not to pay for the blue ray anymore because really I just didn’t see enough of a difference. And yes the streaming content while problematic is still fantastic, and Starz and those other companies want a bigger piece of the netflix apple they want us to be charged even more. Also I have the Amazon Prime option, as much as I love them the quality just isn’t as good as Netflix. 

    PS Could we get a way to flag adverts generated by random bots? I’d appreciate that thanks.

  • Anonymous

    if you hover over a comment you can flag it on the left side

  • Anonymous

    I am still willing to wait and see.  I love Netflix, and I still believe it’s the cheapest and offers the most (if there is something that offers the same amount and diversity of content for a similar price tag please let me know).  I watch a lot of National Geographic, obscure PBS content, older movies, B-movies, HBO and Showtime (since I like some of their programming, but I don’t want to pay that much when they repeat it constantly), and of course the newly released movies and TV.

    Redbox is $1 per rental, per day (and they’re just mostly new releases too?), correct?  I would spend way more, and then I wouldn’t have streaming.  With the previously announced changes (before this whole Qwikster thing) I figured if I dropped from two DVDs to one, plus the unlimited streaming I’d only pay a dollar more, which still is reasonable IMO.

    Now this Qwikster thing does worry me, and I think it’s a bad move.  I believe it will cause more people to drop their subscriptions and solidify decisions of those who they’ve already lost.  Streaming is not what it should be yet, even though it’s wonderfully convenient.  And since Starz play will be going bye-bye, it’s most likely to get worse unless they can quickly get someone to take their place.  Time will tell for me, but I’m probably in the minority.

  • Anonymous

    I’m with you.  If Starz play was still going to be an option in the future, I probably wouldn’t be worried at all.

  • John Wao

    I’m glad they’re splitting up the two services because I have never wanted to stream. I still prefer the physical media.

    Anyone know if our DVD queue will migrate to qwikster (Worst name ever)? 

  • Francesca M

    OMG THANKS SO MUCH

  • Francesca M

    Yeah the Queue is going to migrate but will no longer be shared between the two after that.

  • Francesca M

    RIGHT! Obscure PBS stuff, BBC series, all sorts of crazy stuff that you’ll never find in the devil redbox.

  • Anonymous

    And the ratings we give DVDs and streaming won’t be shared anymore.  I really don’t that that part because I did get some recommendations for DVDs that I liked based on something I also liked from the streaming content, and vice versa.

  • http://zadl.org SuperZADL, Now With Kneepads!

    It’s the 21st Century. Keep up. 

  • Anonymous

    tinyurl.com/2df4ccp

  • Anonymous
  • http://twitter.com/suburbanmuse Michaela Gordon

    I like the way The Oatmeal looks at it.

    http://theoatmeal.com/comics/netflix

  • Anonymous

    There’s nothing “retro” about not wanting to wait for your movie to buffer, or wanting to watch special features, or just plain old liking to not have to connect your TV to the internet (which in an apartment built in the 1940s is not an easy proposition).  I can’t stream using my laptop because my DVI port is damaged, and I don’t want to buy a gaming system or Apple TV or something just to buffer buffer buffer… DVD FTW!

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