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Netflix Kills Qwikster A Month After It Creates It  
User currently offlineD L X From United States of America, joined May 1999, 11268 posts, RR: 52
Posted (2 years 10 months 2 weeks 3 days 10 hours ago) and read 1417 times:

What in the world is going on with Netflix?


http://money.cnn.com/2011/10/10/tech...tflix_qwikster/index.htm?hpt=hp_t1

First they nearly double the rates by making customers buy two plans, one for DVD then one for streaming. Then they break the company into two, sending the DVD customers to the fantastically named Qwikster (not to be confused with Flixter, the other movie company). And today, they've announced that they are abandoning the plan and going back to the Netflix brand only. (But still charging for two separate DVD and streaming plans.)


Has Reed Hastings completely lost his ability to run a company?


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28 replies: All unread, showing first 25:
 
User currently offlineAloha717200 From United States of America, joined Aug 2003, 4479 posts, RR: 15
Reply 1, posted (2 years 10 months 2 weeks 3 days 10 hours ago) and read 1409 times:

Quoting D L X (Thread starter):
Has Reed Hastings completely lost his ability to run a company?

I'm thinking it won't be long before the investors and the board shove him out the door.


User currently offlinemt99 From United States of America, joined May 1999, 6575 posts, RR: 6
Reply 2, posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 1399 times:
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Quoting Aloha717200 (Reply 1):
I'm thinking it won't be long before the investors and the board shove him out the door.

I think that the idea to separate them was actually good. In the future they could have stopped carrying DVDs, killed "Quikster" as a sacrificial lamb, but not hurt the more valuable streaming "Netflix" brand.

However, the timing (just after increasing plans and after loosing streaming content) AND the p*ss poor execution of the maneuver is what will hurt the company.

If there is a very a poster child for a good plan with bad execution, its this one.



Step into my office, baby
User currently offlinecsavel From United States of America, joined Jan 2001, 1362 posts, RR: 4
Reply 3, posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 1380 times:

splitting was a dumb idea. Streaming is the future, but there are still a lot of movies in my queue that aren't available via streaming yet, so I would have had to check two subscriptions, two sites, etc. to find the movie I want. Frankly I think the price increase wasn't that much, but the execution, and the explanation to customers was piss poor.

Netflix has a problem. Why would studios allow netflix streaming when they could set up their own streaming sites. But here is the kicker, expect to pay a lot for the privilege and probably expect to "rent" a streaming movie for like 3 bucks a pop.



I may be ugly. I may be an American. But don't call me an ugly American.
User currently offlinesw733 From United States of America, joined Feb 2004, 6318 posts, RR: 9
Reply 4, posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 1356 times:

Quoting mt99 (Reply 2):
If there is a very a poster child for a good plan with bad execution, its this one.

I think it's also a great case study of how a well respected, loved and widely used corporation can go downhill so quickly because of bad decisions with seemingly little-to-no market research.


User currently offlineKngkyle From United States of America, joined Dec 2006, 401 posts, RR: 1
Reply 5, posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 1356 times:
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Netflix is taking a lot of flak for some stupid decisions lately, but at the end of the day their $7.99 a month for unlimited streaming is a bargain. I would totally sign up for that if I wasn't a tech savvy (wink wink) college student with no money.

User currently offlinemt99 From United States of America, joined May 1999, 6575 posts, RR: 6
Reply 6, posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 1356 times:
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Quoting csavel (Reply 3):
splitting was a dumb idea. Streaming is the future,

It was a good idea because streaming is the future. If it would have been handled properly it would have allowed Netflix to ditch DVDs without ever having to say: "Netflix does not send DVDs any more"

The split should have happened YEARS ago, when Neflix was on top and everyone loved it



Step into my office, baby
User currently offlineKen777 From United States of America, joined Mar 2004, 8220 posts, RR: 8
Reply 7, posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 1343 times:

My feeling is that Netflix was hi with some major cost increases from the studios and started grasping for increased revenues. Part of their problem is due to the studios wanting more money, part to Netflix's inability to effectively reconcile where pricing is heading to the expectation of the consumer, and part to some bad decisions.

The question today is how effective will the company be in rebuilding. And will the studios help or hinder the company's efforts to rebuild.


User currently offlinejetblueguy22 From United States of America, joined Nov 2007, 2783 posts, RR: 4
Reply 8, posted (2 years 10 months 2 weeks 3 days 8 hours ago) and read 1331 times:
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I thought the whole idea was kind of stupid, but I don't fully understand the business environment so there isn't too much I can say. All I hope is that my stepdad doesn't cancel my streaming on me! I would have to start studying :O.
Blue



You push down on that yoke, the houses get bigger, you pull back on the yoke, the houses get bigger- Ken Foltz
User currently offlineD L X From United States of America, joined May 1999, 11268 posts, RR: 52
Reply 9, posted (2 years 10 months 2 weeks 3 days 8 hours ago) and read 1328 times:

Quoting csavel (Reply 3):
Why would studios allow netflix streaming when they could set up their own streaming sites.

Exactly. The studios are sensing the opportunity to bypass both the networks (as in ABC, CBS, FOX, NBC) AND Netflix, and go direct to the consumer. I personally think that's a good thing. The way for Netflix to stay relevant was to keep people believing that they are top dog. That goodwill could more easily be converted to making the studios go through it to be their streaming distributor.

Quoting Ken777 (Reply 7):
My feeling is that Netflix was hi with some major cost increases from the studios and started grasping for increased revenues.

This is exactly correct. Netflix could have saved a lot of headaches by being honest with is customers, instead of these nonsensical, fake-apologetic emails and blog postings from Reed Hastings.



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User currently offlineredflyer From United States of America, joined Feb 2005, 4316 posts, RR: 28
Reply 10, posted (2 years 10 months 2 weeks 3 days 7 hours ago) and read 1291 times:

Quoting D L X (Thread starter):
sending the DVD customers to the fantastically named Qwikster (not to be confused with Flixter, the other movie company).

That one move made me lose confidence in the company, and I don't even own the stock. I was shaking my head in disbelief. I could understand the desire (not saying I agreed with it) to spin off the DVD from the Instant, but to give it a name that is similar to a competing brand...totally bizarre. It would have confused consumers and actually driven many to the competition.

Even more bizarre was the fact that they did not leverage the Netflix brand in the spin off. Netflix has one of the most powerful brands around in business and they were essentially just diluting it and not taking advantage of it in this still-born endeavor.

Quoting D L X (Thread starter):
Has Reed Hastings completely lost his ability to run a company?

Everybody makes mistakes. The issue is going to be whether he can recover from these mis-steps.



I'm not a racist...I hate Biden, too.
User currently offlineRGElectra80 From United States of America, joined Dec 2008, 361 posts, RR: 0
Reply 11, posted (2 years 10 months 2 weeks 3 days 7 hours ago) and read 1269 times:

I think it's all because they couldn't get that stoner kid to give up the Twitter handle, @qwikster.


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User currently offlinecanoecarrier From United States of America, joined Feb 2004, 2839 posts, RR: 12
Reply 12, posted (2 years 10 months 2 weeks 3 days 7 hours ago) and read 1268 times:

Quoting mt99 (Reply 2):
However, the timing (just after increasing plans and after loosing streaming content) AND the p*ss poor execution of the maneuver is what will hurt the company.

And it gave Netflix's competition a leg up, when everyone was looking for alternatives to the price increase Amazon cuts a huge deal with Fox adding 11,000 movies to their streaming library. That's 5 million Prime members who can decide if they either want Netflix and the cost or if you were like me you never even knew you could stream movies through Amazon if you were already a Prime member. I left Netflix once I figured that out.

For comparison, Netflix reported they had 22.8 million in the United States early this year. Now, after this they lost at least a million subscribers and their stock fell 60%.

Quoting D L X (Reply 9):
The studios are sensing the opportunity to bypass both the networks (as in ABC, CBS, FOX, NBC) AND Netflix, and go direct to the consumer. I personally think that's a good thing. The way for Netflix to stay relevant was to keep people believing that they are top dog.

The studies might see it that way, but as a consumer if you're going to pay for a service wouldn't you want to get to stream an ABC sitcom one night then a Fox movie the next? That was always the benefit of using Netflix a lot under one roof.



The beatings will continue until morale improves
User currently onlineRevelation From United States of America, joined Feb 2005, 12425 posts, RR: 25
Reply 13, posted (2 years 10 months 2 weeks 3 days 6 hours ago) and read 1255 times:

Quoting Ken777 (Reply 7):
My feeling is that Netflix was hi with some major cost increases from the studios and started grasping for increased revenues. Part of their problem is due to the studios wanting more money, part to Netflix's inability to effectively reconcile where pricing is heading to the expectation of the consumer, and part to some bad decisions.

The problem for the industry is where pricing is heading.

Redbox seems to be raking it in with the $1 per night DVD, and consumer's expectations are heading to that range.

I saw a $19.99 DVD on a display at a cash register right near the Redbox machine and really wondered why they were bothering with it.



Inspiration, move me brightly!
User currently offlineD L X From United States of America, joined May 1999, 11268 posts, RR: 52
Reply 14, posted (2 years 10 months 2 weeks 3 days 6 hours ago) and read 1250 times:

Quoting canoecarrier (Reply 12):
The studies might see it that way, but as a consumer if you're going to pay for a service wouldn't you want to get to stream an ABC sitcom one night then a Fox movie the next?

ABC and Fox don't own the shows (usually). They are merely distributors of studios' shows. The studios are the names you've heard of at the end of the show, like Worldwide Pants, and Bad Robot, for instance. And all those funny sitcoms from the 80s and early 90s were all Carson Warner (or something like that).

Right now, viewers are already having to go to different sources to see their shows, and they're used to it. They're called Channels. What I think will happen in the future is that the channel will not have every type of show, like ABC does, but will be more narrowly tailored. As in, do you like House? Well, you'll probably like the other Bad Robot productions, so subscribe to the Bad Robot streaming channel. (And skip Fox.) Like Major League Baseball? Well, skip Fox and TBS, and go straight to the MLB streaming channel. (This one is actually already in use, even!) The same is on the horizon for movies. (Why would I pay for all of Netflix's total library, when I can just get the Michael Bay shoot-em-ups that I'm actually interested in?)

Let's face it: I have no use for 90% of the shows on the major networks, and am only interested in a few. I would much rather buy a plan to only stream those shows and movies that actually interest me.



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User currently offlinecanoecarrier From United States of America, joined Feb 2004, 2839 posts, RR: 12
Reply 15, posted (2 years 10 months 2 weeks 3 days 6 hours ago) and read 1240 times:

Quoting D L X (Reply 14):
Let's face it: I have no use for 90% of the shows on the major networks, and am only interested in a few. I would much rather buy a plan to only stream those shows and movies that actually interest me.

I see what your saying in that scenario, Bad Robot made Lost, which I liked as well as House. But, I like Mad Men too and the production company's only other show was the Sopranos.

If you were a consumer that liked that you could hear about and watch some movie you hadn't seen before and didn't know what production company made it Netflix arguably meets that demand, as do others.

Quoting D L X (Reply 14):

Right now, viewers are already having to go to different sources to see their shows, and they're used to it. They're called Channels. What I think will happen in the future is that the channel will not have every type of show, like ABC does, but will be more narrowly tailored.

If you can find a way to charge people once instead of 5 times for each show this would work. Simplicity seems to be the big consumer draw with all of these services.



The beatings will continue until morale improves
User currently offlinesw733 From United States of America, joined Feb 2004, 6318 posts, RR: 9
Reply 16, posted (2 years 10 months 2 weeks 3 days 6 hours ago) and read 1238 times:

Quoting Revelation (Reply 13):
Redbox seems to be raking it in with the $1 per night DVD, and consumer's expectations are heading to that range.

Redbox is great. I don't use it all the time, but when I do I usually have a good experience. Flaws do exist in the system ("Machine Is Full: Return Cannot Be Accepted"), but for the price I am willing to put up with that occasionally. And the fact that I can look up a specific movie, find the closest Redbox with it, and even put it on hold all from my computer, without taking the risk of a certain machine not having what I want, is great.

Quoting D L X (Reply 14):
(Why would I pay for all of Netflix's total library, when I can just get the Michael Bay shoot-em-ups that I'm actually interested in?)

A la cart TV programming has been something a lot of people want to see for a while. I definitely think it has a future, but there are a lot of good, small networks out there that will get left in the dark when they really shouldn't.


User currently offlineD L X From United States of America, joined May 1999, 11268 posts, RR: 52
Reply 17, posted (2 years 10 months 2 weeks 3 days 5 hours ago) and read 1213 times:

Quoting sw733 (Reply 16):
I definitely think it has a future, but there are a lot of good, small networks out there that will get left in the dark when they really shouldn't.

A la carte should be great for small studios. Think of how awful it was when Arrested Development and especially Family Guy were dropped. Fox thought its money and time was better spent on other shows. Fortunately, Family Guy was resurrected, but (at least at this point) Arrested Development is still gone.

If those shows were able to sell directly to the viewer, we'd still have them.


But I'm drifting pretty far away from Qwikster... except I guess that it is this promising future for streaming that is driving DVD business downward.

When Qwikster was announced, I immediately canceled the DVD portion of my plan. (I had only checked out 1 DVD in about 2 years anyway. I don't even know why I have a DVD player.) I much prefer streaming.



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User currently offlineN1120A From United States of America, joined Dec 2003, 26426 posts, RR: 76
Reply 18, posted (2 years 10 months 2 weeks 3 days 3 hours ago) and read 1124 times:

Quoting D L X (Thread starter):

What in the world is going on with Netflix?

They got greedy and didn't plan it correctly.

They should have just phased in a price increase and allowed people to maintain mixed plans at a discount.

Quoting D L X (Reply 9):

This is exactly correct. Netflix could have saved a lot of headaches by being honest with is customers, instead of these nonsensical, fake-apologetic emails and blog postings from Reed Hastings.


Or, they could have even taken the offensive against the studios and probably would have had the moral high ground.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlinesw733 From United States of America, joined Feb 2004, 6318 posts, RR: 9
Reply 19, posted (2 years 10 months 2 weeks 3 days 1 hour ago) and read 1075 times:

Quoting D L X (Reply 17):
(at least at this point) Arrested Development is still gone.

Get with the times man, A.D. is back!  http://tv.ign.com/articles/119/1197849p1.html

Well, it's kinda back...


User currently offlinecanoecarrier From United States of America, joined Feb 2004, 2839 posts, RR: 12
Reply 20, posted (2 years 10 months 2 weeks 3 days 1 hour ago) and read 1072 times:

Quoting D L X (Reply 17):

But I'm drifting pretty far away from Qwikster...

I'd be pissed if I got promoted from VP of indy film DVD distribution at Netflix to Qwikster CEO and fired a month later   How's that short lived title going to look on his/her resume?

Quoting N1120A (Reply 18):

They should have just phased in a price increase and allowed people to maintain mixed plans at a discount.

Instead, we're back to the same price increase but not having to deal with two separate companies. Basically, the price increase was the sticking point with their members, not the two companies, but they're still going to do it.

Probably a bad example, but my cable company gives me a discount if I "bundle" phone, cable and internet. So does my insurance company. Cable service and insurance are about as conservative an industry as it gets with marketing, but as you say Netflix could have phased it in a dollar at a time over a couple years and not created this marketing disaster.

But, who knows what will happen in the next 2-3 years. Hell I was going to Blockbuster and paying late fees up until a couple years ago and they had less than half the selection any of the online companies had.



The beatings will continue until morale improves
User currently offlinefxramper From United States of America, joined Dec 2005, 7247 posts, RR: 85
Reply 21, posted (2 years 10 months 2 weeks 2 days 23 hours ago) and read 1044 times:
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Quoting N1120A (Reply 18):
They should have just phased in a price increase and allowed people to maintain mixed plans at a discount.

...or grandfathered loyal customers and then announced a price increase. I cancelled my plan (3 dvd and streaming) today.


User currently offlineN1120A From United States of America, joined Dec 2003, 26426 posts, RR: 76
Reply 22, posted (2 years 10 months 2 weeks 2 days 23 hours ago) and read 1039 times:

Quoting canoecarrier (Reply 20):
Probably a bad example, but my cable company gives me a discount if I "bundle" phone, cable and internet. So does my insurance company. Cable service and insurance are about as conservative an industry as it gets with marketing, but as you say Netflix could have phased it in a dollar at a time over a couple years and not created this marketing disaster.

Cable has virtual monopolies/oligopolies, yet they still offer bundle deals. Netflix should have seen this.

Quoting fxramper (Reply 21):
...or grandfathered loyal customers and then announced a price increase. I cancelled my plan (3 dvd and streaming) today.

Exactly.



Mangeons les French fries, mais surtout pratiquons avec fierte le French kiss
User currently offlineAirstud From United States of America, joined Nov 2000, 2652 posts, RR: 3
Reply 23, posted (2 years 10 months 2 weeks 2 days 20 hours ago) and read 1005 times:

Obviously, Netflix's next move will be naming Meg Whitman as CEO.


Pancakes are delicious.
User currently offlineouboy79 From United States of America, joined Nov 2001, 4581 posts, RR: 23
Reply 24, posted (2 years 10 months 2 weeks 2 days 15 hours ago) and read 953 times:

Eh it is what it is. When they started charging for streaming, I dropped the DVD portion and kept streaming for the $8 a month. The content at time leaves something to be desired, but overall I'm happy. I get access to a lot of shows and movies that I normally wouldn't watch and I don't get limited.

I've had a few friends get all emo and quick and go to Blockbuster or the other various companies. I admit, I really enjoyed Blockbuster's service and actually kept it. However, I will never do their streaming. You have to pay anywhere from $2 to $5 PER MOVIE in order to view, and only get it for 24-48 hours. Sorry, that isn't a bargain for me. If I wanted to do that, I would just do PPV. Then they announced their newer streaming product, but you need to be a Dish Network customer. Sorry, not leaving DirecTV.

If you only watch a movie or two a month, yeah go RedBox or the Blockbuster kiosk systems. However if you like to jump around and try new things out, it is still hard to beat Netflix. Vudu and the others are still going to charge more.

Could they have handled it better? Oh most definitely. Will they recover? Probably. Should customer's have been grandfathered? I would say yes...but only for a year. Give them time to adjust to the new system and also give Netflix the added time to acquire more content.


25 MAH4546 : Worldwide Pants, etc. are production companies. Most television shows are made by the six major studios - ABC, CBS, Universal, Fox, WB and Sony. With
26 csavel : Actually my entire quote was, which is a different thing entirely from what it sounds like I said in that quote. Streaming is the future, but why it
27 wn700driver : I would think for the same reasons that the airlines (well the ones that aren't WN & AA anyway) allow expedia et al to aggregate their fares alon
28 D L X : There may be reasons, but I don't think that's one of them. It makes sense for buyers of airline transportation to go to the airline transportation s
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