I'm not so sure about Netflix splitting into Qwikster for media-by-mail
I'm really stoked that Netflix Qwikster is adding video games to their catalog, but I'm not so sure breaking the companies up is the best idea. I get that there are a ton of reasons why they might want to do it, and I actually think their concerns about doing the best possible job at each discipline (media-by-mail vs. streaming media) is admirable.
The thing I'm worried about, though, is the user experience. Really, that's it. The fact that Qwikster strikes me as a crappy brand is irrelevant. One of Netflix's greatest strengths, before they decided to do this, was being able to acquire any content by whatever means; if it isn't on streaming, get the disc, just like that.
Moving from that to a system where we managing two media queues with two separate availability timelines on two different services that apparently won't talk to one another is a really weird choice. Granted, since they're decoupled I think it will force both services to be better since the switching costs for users for either service will now be significantly lower, but any way I slice it, this feels like it simply isn't the most elegant way of approaching the problem from the user's perspective.
They just completely ruined everything that I loved about the site. Having a master DVD queue, then waiting for those movies to pop up in instant. Having a master list of every movie I liked, as well as ratings. The streaming selection still isn't good enough to be a standalone site. I'm pretty pissed off.
I agree. With DVDs and streaming they had a pretty unbeatable selection but now they're almost on par with Amazon's Prime streaming option (a little ahead though). Unless they have something up their sleeve I think this is a bad move.
Splitting up the services seems like a terrible idea, as Neflix's content does not even approach comprehensiveness, and the split kills any potential crossover between the services.
In the wake of the big price hike - even bigger for me, as they stopped grandfathering their earliest subscribers into bigger/cheaper plans - I dropped streaming entirely and moved from 4 BD out per month to 2. Splitting the sites in two means there is even less of a chance that I'll add streaming back. True, this might make Netflix try harder because it is being judged entirely on its streaming catalog, but, that's just it: unless they get a LOT better, I can't see paying for yet another service. I have amazon Watch Instantly thanks to Prime; if I want random stuff to watch (rather than Qwikster's truly comprehensive disc library) that should suffice.
Netflix could be creating a separate brand in order to sell off that piece of the company if they believe that the DVD business will eventually stagnate and decline. So, completely separating the streaming and DVD businesses would make that move much easier. This does make some sense. Wonder if they have been talking to any potential buyers.
I've been streaming only since it was made an option. This doesn't really make a huge difference to me functionally.
That being said, it still really bugs me.
The name change is absolutely horrible. It sounds cheesy. It doesn't inspire confidence.
I don't understand why the company, if they aren't planning to sell Qwikster, wouldn't just create a separate division internally. Keep things consistent and streamlined for the user. The "This video isn't available for streaming but we have it on DVD" thing always tempted me to add back the DVD service but if I have to have a separate account (and all that entails)... well, the convenience is gone. I see no point in it.
I will not stop using Netflix as long as they have content I want access to in the way that they provide it but I'm no longer feel the same dedication to the company. If something "better" comes along, I'm now more inclined to jump ship.
This is a "skating to where the puck is going to be" move. Streaming is the future that they are banking on. And what a great way bolster a business that doesn't have a long term future by adding games.
Spinning off the disc rentals makes it easier to sell or shutdown that business in the future.
For me when the price went up for discs I dropped to streaming only. Sure it doesn't get the latest movie early but my hope is that will change in time. If not Netflix then somebody will get it working with the studios.
Your summary is 100% accurate. Why more people don't realize this is beyond me. It reminds me of when Apple removed the physical floppy disk drives from their computers. People freaked out, but in reality Apple was ahead of the curve and also helping move the market off that type of physical media.
In this instance, Netflix sees where we are at in a few years and is preparing for that future. Real easy to kill of the the dying physical disc portion of you business when it is a separate business entirely.
I also see a chicken or the egg problem here. Most people criticize Netflix for a lacking streaming library. I've found their streaming library quite robust and legitimate as of late. They are missing the new releases which is probably what most people criticize them for. The trouble is they can't get new releases because Hollywood won't give them to them. Hollywood chooses to believe we still live in a world where everyone runs out and purchases DVDs on release day. People aren't buying discs like they used to and they won't in the future either. Netflix knows the future is in streaming. Nobody wants to switch to streaming only until the library is complete. The library won't be complete until Hollywood admits the future is in streaming. But the future won't be in streaming only until most people are there. Netflix is taking that next step and hoping consumers and Hollywood will follow.
By the rate "hike" last month and now spinning of physical media, Netflix is essentially removing the floppy disk drive. They are trying to shift the market substantially toward streaming only. The more streaming only customers Netflix has, the more apt Hollywood will be to want to get their content to where consumers are.
Netflix sees where we need to get to and is kicking consumers and Hollywood in the butt in the right direction. I can't say I disagree with their decision.
I don't know enough about the business to decide if this split will strengthen or weaken Netflix's bargaining position with content providers, but unless they have some great negotiation plans up their sleeve they may have given the wrong service the lasting name.
I hope that Qwikster gets a great API, and that someone (hopefully from either team) creates an app that connects the two and helps you synchronize ratings. On Qwikster you could see "oh hey, this movie's also available for instant on netflix". Maybe they'll be nice and say "it's available on hulu too", or if it's only on hulu, just say that.
It could be good, but since serendipity and convenience isn't good for business, I highly doubt it.
I agree with the heart of you opinion. It's strange to me that they would attempt to make the business better by making the user experience more clunky. You're completely right, that what it boils down to is the user experience, separate websites is a very bizarre choice.
I'll accept the premise that separating the two teams into different companies will be beneficial to to both sides, and help them excel (I don't know how this benefits the new Qwikster brand but...). But what I have the hardest time accepting is that I'll now have to manage 2 separate queues, on 2 separate websites, with 2 different entertainment pools to choose from. I simply don't understand how completely separating the two from even 'talking' to each other is going to benefit the user or the bottom line.
While I am typing this with only about 10 minutes of processing time since i've read the blog post, I can't see my opinion on this changing much.
Oh! and I didn't even mention the separate ratings deal. I've spent years building my ratings in Netflix, so that the suggestion algorithm is as accurate as possible. Am I going to have to start from scratch on one of the sites.
I cannot speak for all users, but this will most likely not cause any problems with current user experience. Occasionally I use netflix.com to manage my instant play queue, but on average I use a third party client. In my case a Wii or Roku. With streaming I actually rarely use my queue at all. I tend to browse suggested and similar videos and tv shows to find one that meets my wants at the time. I'm willing to believe that Netflix has researched the actual "instant" queue usage and decided that it was relatively low.
I find recommendations to be a very good feature and use it occasionally, with pleasant outcomes. Separating the sites, (it seems) will not cross-populate the review rating, making these recommendations deviate. The only solutions to this, seems to be going to both sites each time you are rating a movie or show? This all should be done in the backend by NETFLIX and QWIKSTER (not sure I like the name either). I had already decided to cancel by DVD service and keep the streaming only, this just reinforces my decision. There is one thing that will have me check out QWIKSTER at least once the Game Rental part of the service. I had tried GAMEFLY who offered 1 game rental a month for around $16. The service worked much the same way netflix DVD service works, with the important distinction that Games would take a full week to get the next game after I sent one back. Netflix has a 3 days (max) turn around time for me. If the QWIKSTER's game service does not add too much ($3 per month) to the cost per month, I may consider getting it for GAME rentals and the occasional DVD.
as a ten year member of netflix, this separation of the queues is the first decision by netflix that really bothers me. the auto-population of the streaming queue from the dvd queue was how things showed up there. now how am i going to know when one of the 500 dvds on my queue are available on streaming
Splitting the business now allows Netflix to rapidly expand its streaming service in overseas markets. Greater competition in the European market would be especially welcome where innovation in this sector has been painfully slow and dominated by cosy relationships between the studios and a small number of dominate platform owners.
I'm one of the odd ones who canceled streaming and wen't DVD (Bluray actually) only. I get that streaming is the future, but for now the selection and HD quality are crap. If this will help them get to their long term strategy then so be it. I get it. But I'm a long time (1999) paying customer and they shouldn't alienate me along the way. Ryan is spot on with the UX perspective, they unnecessarily forcing users into jumping through hoops to simply get to media they want to watch, with a long term strategy of attrition of physical media consumption.
Seems to me they're opening the door for Amazon to step in w/shipping and ramping up streaming via Prime.
Does this move bring any competitive advantage to Netflix relative to the juggernauts that are iTunes, Amazon Prime, or even Hulu? Did dividing up the services as separate business entities enable Netflix to protect cash or other assets to preserve or ideally build a warchest that has the potential to compete? The fact is that Apple, Amazon, Google, Facebook, or even Microsoft can deploy new streaming services seemingly at will - and they have far deeper pockets than Netflix.
The decision to break up the company was certainly driven by the cold fact that streaming is the future, and that the winners in the category will likely be the entities with deep pockets for marketing rather than a well conceived and implemented UX (or brand name).
This is not going to play out the way Lexus did for Toyota...
I only used streaming for TV shows (especially older ones) and documentaries. Netflix's streaming video and audio quality (especially audio) for movies isn't as good as a DVD's, let alone Blu-ray. (The starz stuff was particularly bad.) I may stay with the DVD service (I have to investigate BlockBuster first.), but I'll probably change to Amazon Prime for streaming.
My kids use the Netflix streaming a lot, but with this latest change, I am going to try Blockbuster for free for 30 days for their DVD service. I pay for Netflix's (well Qwikster now) 1 at a time service and blu-ray for an extra fee, so that is $11.99 a month for that. Blockbuster is $9.99 a month right now for new subscribers, so if the service and quality is equal, I might as well change to Blockbuster and just keep streaming with Netflix.
My wife and I have subscribed to Netflix for several years. We had the $9.99/mo Unlimited Streaming + 1 DVD plan. Honestly, we didn't use the DVDs too often, although it was nice to say "Well, that's not available on streaming, let's get the disc." When Netflix hiked the price, we dropped the discs.
I have longed for games, and had tried Gamefly, but hated it (man their service sucks!). Had Netflix added games, I might've added the discs back, and the games too.
However, I do not want to have to manage that many subscriptions. I like the "one stop" idea.
Maybe there'll be an app for that, to resurrect an old catchphrase.
Agree 100%, I'm canceling one or both shortly. I don't need to manage two websites. It will be interesting to see how this turns out - Netflix's move into streaming was one of the hardest and in hindsight, greatest business decisions, I have a feeling this will go down as one of the worst business decisions ever. Glad I don't own the stock!
I don't understand this move at all. Why can't they just keep them separate queues like they are now? It works fine for me. I guess if they have a link between the two sites at the top of the page at all times, I wont mind, it's just weird. I'm juiced about the video game thing though, it's the one thing I really want from Netflix that they didn't already give me.
It wasn't until the end of Reed Hasting's note that I got it: The DVD biz will forever be US only, likely due to the complexity of DVD region coding. Netflix streaming is and will be international.
I still think they could have spent more than a 30 min whiteboard session to come up w a name (and get the Twitter address first) but whatever.
The most powerful thing that a company has is its brand. To throw your brand away in hopes of just having it be a new brand is simply bad business. Stock holders should be very mad. Qwikster is an awful name, it sounds way to much like Quixtar which is a multi-level marketing program owned by amway. I already canceled my streaming when the price increases were announced and until they actually get some new content I will not be adding it back on anytime soon.
Wow. I could totally understand the price hike. I griped about it, but I could understand it and bit the bullet because I love the service. This splitting though just simply removes the convince factor from Netflix. Managing two log ins over two accounts on two websites just seems like a poor decision. The beauty of Netflix was its "one stop shop" idea. That is simply disappearing now. It is hard to imagine Netflix tearing down their own empire here.
It makes almost no sense to keep the Netflix part as I had already planned to cancel the streaming, anyway. I prefer movies on disc because of the audio/video quality. Netflix streaming is not really suitable for the living room, but is great for the iPad, iPod, etc where low video/audio quality isn't as noticeable.
I am interested in the Qwickster because of the movie discs but also for games since I never got into GameFly.
Now, if only Amazon would release a streaming app for the same range of devices that Netflix has, I would use it since I already am a Prime member... for convenience, not quality.
I have been a streaming only customer since that option was first introduced. I never really missed the DVD option. I found that if the streaming side didn't have what I wanted to see, the local library usually did.
I think Netflix really wants to end the practice of sending DVDs by mail. It's costly and I'm sure a certain percentage of them go missing every month. Streaming has killed my desire to own a title, since I can watch it at home or on my mobile anytime I want. It wouldn't surprise me if in a year or so, we won't see physical DVDs sent through the mail anymore.
There really isn't a good way to deal with this from the user's perspective. Netflix wants to become a streaming-only company and move away from DVDs; it is just choosing to move sooner rather than later. With the separation this might allow their streaming business to become more fully realized by providing a great amount of content in a timelier fashion than would be possible if Netflix continues to keep the DVD and streaming businesses together. This might also allow the DVD business to at least attempt to move past the delayed releases that movie studios have imposed in order for Netflix to provide more streaming content in the first place (of course that may be overly optimistic).
It's crazy to me that they'd want to do this. It seems to me that Netflix should have morphed into a streaming only service eventually, whenever the DVD and Blu-ray mediums die out! This just means Qwikster will be fairly niche if the new Netflix starts getting AAA titles quickly. I also agree that being able to have a single queue was awesome, losing that synergy between the services is a step away from 'the dream' of buying/renting something once and being able to watch it in whatever way you wanted.
Also, Qwikster is one of the stupidest names ever conceived.
Qwikster sounds like something they would have come up with in Springfield on The Simpsons. KwikEMart streaming service. Their brand agency should be fired. Unless the tactic was to come up with something so ridiculous that no one can take it seriously and let it wither on the vine.
I got Netflix originally for the back catalog of stuff they have on physical media in addition to new releases. Giving Blockbuster a shot at my physical media business with their 30 day trial. Unless they are horrible, they are getting my business for now.
Streaming may be the 'future' but with bandwidth caps and the crappy (at current bit rates) quality of video and audio (TV quality or worse), it is not the current state. It was nice as a reason to stay with Netflix over Blockbuster. Don't have kids, and really don't have time to rewatch a bunch of '80s TV shows, so I am about to drop that too - just not worth the additional $8 a month right now.
While you still can - check their own 'top 100' list. Only 6 of those titles are available for streaming.
Week 1 with Blockbuster: Delivery was a little slower for the first titles (2 days instead of overnight with NF), but didn't realize how much I would like the ability to swap for a title in store. For new releases that I missed getting on release day with NF it would be months before they had the BluRay in stock. Walked in to Best Buy today and picked up a new BluRay release that NF won't even offer for another couple of weeks.
Two more weeks until my NF account renews for another month - pretty sure I am going to cancel it at this point. They have made it very clear that they want to dump physical media, and for me BluRay quality video and lossless audio are very important. Going to give my business to Blockbuster since (for now) they seem to be the only company interested in giving me what I want - subscription based access to the highest quality audio/video in the consumer market.
I am sure you meant to say BLOCKBUSTER instead of BestBuy, when you say you "Walked in to..." I tried Blocksbuster's service when they first started competing with Netflix on DVDs. I even drooped Netflix, no need to pay twice. I loved going to the store and picking up my new movie. I watched a lot on new movies from the store and older catalog from the mail. Definitely a good way to go if you have a store near.
Then Blockbuster got greedy and started racing prices, while Netflix added streaming and keeped the same price. I switched back to Netflix after this. Now the closes Blockbuster is 8 miles away from me and NOT near any of my daily travels. Maybe Dish Network will save it, now that they bought it.
Given how inept Netflix has been of late, guessing my ratings are not going to get transferred to one service or the other. More significantly, the combined service was super convenient to the point where I didn't mind the wait for optical media delivery because it was zero effort to use when Netflix streaming wasn't available for a title. That convenience is certainly gone now! Maybe someone will build an app that allows me to manage both queues and ratings in one place? Nah. Who am I kidding . . .
I kept my Netflix DVD/Blu-ray service through the price hike, but this is one unwelcome change too many for me. I'm probably going to opt out of Qwikster. The new game rental option is not so interesting. Haven't they heard about DLC? Network login required to play? That sort of thing is designed to kill game rentals.
This is so weird. Sort of like a buggy maker getting out of the buggy business . . . in 1880.
We are much closer to 1908. Everyone is about to start buying Model Ts.
Also, this isn't a buggy maker getting out of the buggy business. This is a transportation company trying to get people to stop using buggys and switch to cars. But people don't want to drive the cars because the roads are shitty. But the more people that are driving cars then there will be more reason to have more and better roads.
Streaming Blu-ray quality video is laughably bad. Fewer than 10% of US households have access to the necessary bandwidth even if they could pay for it. That is not changing anytime soon. Also, Blu-ray is still getting traction. It is overly pessimistic to assume that Blu-ray sales and rentals can safely be ignored - especially when there is no streaming alternative. And that is only one reason why optical is not dead.
The other point is that the synergy of delivering both experiences can be a selling point. The old streaming + optical plans reduced friction for streaming - especially with television shows. A household will cut back back on premium cable/satellite channels if they believe they can get what they want to see via that combined service. Convenience is very important, but so is selection. And optical disks provide a useful safety net for those titles where a streaming deal just can't be made . . . remember Starz?