D L X
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Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 2:18 pm

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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Aloha717200
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 2:22 pm

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.
 
mt99
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 2:34 pm

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.
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csavel
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 2:54 pm

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.
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sw733
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 3:12 pm

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.
 
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kngkyle
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 3:13 pm

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.
 
mt99
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 3:13 pm

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
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Ken777
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 3:20 pm

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.
 
jetblueguy22
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 3:33 pm

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.
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D L X
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 3:39 pm

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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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 4:53 pm

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.
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RGElectra80
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 5:20 pm

I think it's all because they couldn't get that stoner kid to give up the Twitter handle, @qwikster.
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canoecarrier
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 5:24 pm

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.
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 5:46 pm

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.
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D L X
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 5:55 pm

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.
 
canoecarrier
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 6:09 pm

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.
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sw733
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 6:10 pm

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.
 
D L X
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 6:45 pm

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.
 
N1120A
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 9:16 pm

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.
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sw733
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 11:21 pm

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...
 
canoecarrier
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RE: Netflix Kills Qwikster A Month After It Creates It

Mon Oct 10, 2011 11:25 pm

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.
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fxramper
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RE: Netflix Kills Qwikster A Month After It Creates It

Tue Oct 11, 2011 12:44 am

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.
 
N1120A
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RE: Netflix Kills Qwikster A Month After It Creates It

Tue Oct 11, 2011 1:03 am

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.
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Airstud
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RE: Netflix Kills Qwikster A Month After It Creates It

Tue Oct 11, 2011 4:28 am

Obviously, Netflix's next move will be naming Meg Whitman as CEO.
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ouboy79
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RE: Netflix Kills Qwikster A Month After It Creates It

Tue Oct 11, 2011 9:11 am

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.
 
MAH4546
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RE: Netflix Kills Qwikster A Month After It Creates It

Tue Oct 11, 2011 10:34 am

Quoting D L X (Reply 14):
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).

Worldwide Pants, etc. are production companies. Most television shows are made by the six major studios - ABC, CBS, Universal, Fox, WB and Sony. With the first four, they tend to sell their programming to their sister network, but there are exceptions (ABC produces The Amazing Race for CBS; Fox does a lot of hit cable shows like Burn Notice; Universal makes House for Fox). Companies like Bad Robot are far too small and don't have the capital to produce shows on their own, and have to align with major studios to get shows off the ground (I.e. Lost, which is Bad Robot-ABC). Carsey Warner is a rare exception in that it did indeed operate truly independently and continues to solely own it's programming, many programs of which are available on Netflix. But these days you'd be hard pressed to find a hit show not made by one of the six major studios, either alone or aligned with the smaller production companies. Just looking at the eight highest rated shows on broadcast this season, they are all by the major studios - Two and a Half Men (air on CBS, produced by WB), Modern Family (ABC, Fox), The Big Bang Theory (CBS, WB), Mike and Molly (CBS, WB), 2 Broke Girls (CBS, Sony), How I Met Your Mother (CBS, Fox), New Girl (Fox, Fox), and NCIS (CBS, CBS).

[Edited 2011-10-11 04:05:08]
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csavel
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RE: Netflix Kills Qwikster A Month After It Creates It

Tue Oct 11, 2011 8:08 pm

Quoting mt99 (Reply 6):
Quoting csavel (Reply 3):
splitting was a dumb idea. Streaming is the future,

It was a good idea because streaming is the future.

Actually my entire quote was,

Quoting csavel (Reply 3):
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.

which is a different thing entirely from what it sounds like I said in that quote. Streaming is the future, but why it is a bad idea *now* is that there are too many movies, for whatever reason, mostly rea$ons, if you know what I mean, that are NOT available via streaming, so all those people who want streaming, but have 100 movies in their queue that they can't get via streaming, they'd have to join a new site, new payment details, add 100 movies to that queue. If I had to do all that, I might re-consider Netflix entirely.
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wn700driver
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RE: Netflix Kills Qwikster A Month After It Creates It

Wed Oct 12, 2011 12:27 am

Quoting csavel (Reply 3):
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 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 along with those of the competition. Just works out better for everyone that way and it's one more outlet for their product.
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D L X
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RE: Netflix Kills Qwikster A Month After It Creates It

Wed Oct 12, 2011 3:02 am

Quoting wn700driver (Reply 27):
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 along with those of the competition. Just works out better for everyone that way and it's one more outlet for their product.

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 store (orbitz, etc.) to compare options. But when it comes to television shows, the person that wants to watch House doesn't need to compare House to other television shows to decide what he wants. He already wants House, and goes straight to the House store.

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