I know they say there is a first time for everything, but I never thought that I would see the day where you posted some well thought out and cogent information, and then immediately turned around and backed it up. I am impressed WC, thank you for this information.
I got this in an email this morning. The ?
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
"I messed up with the price increase, but I'm not gonna change it at all!"
good luck with that
, now I have to get used to saying Qwikster.
Not what he wrote, but ok...
I am not sure, but I'll bet that the market reacts well to this.
If the markets change because of this it exemplifies how stupid people are. All he did was announce that he'd be changing the name of something, it doesn't do anything in the grand scheme of things. People like me who's account went from $10 a month to $16 a month and cancelled aren't gonna say, "Oh I get it! Now that there's two different names, I'm willing to accept a 60% price increase!"
gimmicky things like this are a sign of desperation
No he announced the seperation of two different movie delivery models in order to allow each to focus on their strengths and to use that specialization to gain compe ive advantage. This happens all the time, when a company announces that they are spinning off superflous divisions to focus on "core competencies" the market generally assumes that this will make them more efficient. The only difference here is that the spinoff is the one with the traditional "core competency" and the main company has the desired "core competency".
When companies announce they are "spinning off divisions" does it generally include a 60% price increase for customers?
Gotta agree with the above. Netflix's selection is pretty ty.
I could care less what happened to the DVD service. My price didn't change. I was actually happy that they were raising prices . . . more revenue to lock in streaming contracts. Now they are spinning that division off, so that revenue won't materialize, but at least they can focus their efforts on building the side of the business that isn't going to take a nosedive in the near future. DVD's are a hassle, I cant believe anyone uses hardcopy of anything anymore, ESPECIALLY digital media.
When companies announce they are "spinning off divisions" does it generally include a 60% price increase for customers?
LMAO. It has the tone of someone who sent out a drunk email or text last night and now, trying to explain it, is coming off like even a bigger .
sports please.
Literally the ONLY arguement for paying for cable, with more sports bringing their offering to broadband without the necessity of a cable provider, that arguement is slowly waning.
feb 28 I think.
This is exactly what I got from it.. it made me even more mad.. I had put my account on hold, but this is enough to cancel.
I have to agree with Drachen. I don't think this "changes" anything but that wasn't the intent. The apology wasn't meant to say the made a business model mistake but to explain why they did what they did. Its not really about being swayed just because he apologized, its about looking into the logic of the moves and agreeing with the strategy.
pretty decent take on this.
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Netflix used to have compe ion from Blockbuster... But Netflix sued Blockbuster, and won. I had a trial Blockbuster mail DVD subscription before I ever tried Netflix.
Netflix was pretty cool for old TV shows... But the content selection always feels like it is shrinking, never getting bigger or even staying the same. I gave my subscription to my brother. He is quite pleased watching the entire X-Files/Star Trek TNG series with his wife at night... But he will tire of that soon enough...
Netflix needs more streaming content. Period. Otherwise, they will die, price hike or not...
I don't know how long they can keep it up but Blockbuster has significantly dropped the price on store rentals and games. Last week I rented two movies and a game for a few bucks. AND they gave me a coupon for a free Thor rental and another coupon for a free regular rental.
As soon as I finish up some of the series that I have been watching like Original Star trek and perhaps Lost. Consider me one of those that have walked away.
Pretty sad really, it was pretty awesome when I first joined a couple of years ago. It just seems like the moment they killed Blockbuster they no longer cared.
Lulz. Yeah, BB has become coupon crazy. For the summer, on Sundays, any movie le older than 6 weeks was $.49 each. Now, anything regularly priced .99 (movies (a year+ old) or games (6 mos or so old)) on Sundays is .49 each.
And they're also offering an introductory $8.00 offer on their Unlimited, 1-at-a-time exchange pass in-store for any movies or games. No due dates or late fees on anything.
I still have Netflix streaming, but waved bye-bye to my DVD mailer subscription over a year ago.
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