Amazon Prime streaming is more than enough for children, and most families already have it.
And the kids don't care at all who they get the shows from.
I expect Amazon to continue to aggressively compete in this area, not to mention Apple and someday, Google. Netflix is giving away their core advantage -- a huge content library and DVD/Blu-ray backup for anything not-yet streamed. No one else has that. Now they're just like everyone else.
But Amazon Prime streaming is not (yet?) available on the AppleTV that the kids use. Sure I keep meaning to jailbreak the darn thing but I never quite find the time to do so.
Netflix has huge penetration into hardware that Amazon does not have and to me that is a huge leg up for them. Also I can not believe that Netflix does not have an ace up their sleeve, i.e., a serious infusion of streaming content. However, I would be in awe if they did not have that ace up their sleeve and are instead trying to push the content providers into the present so that we can get on with the future.
From the customer's perspective, they are not two separate businesses. They are one, strong business (well, were).
Streaming is most valuable when DVD is (a) there as a backup, and (b) managed with the same system.
Netflix has seriously decreased the value of their streaming offering by separating out the DVD and de-integrating their systems.
There is basically no reason to pay for Kwikster now (terrible name BTW), and the streaming is now an extra cost. We'll have our kids use Amazon Prime, which we already pay for. They're much less choosy for content anyway, and it cuts off another monthly bill.
Someone inside of Netflix should have had the balls to tell your CEO this was a stupid idea and customers would hate it.
You don't speak for all Netflix customers when you offer your perspective.
I joined Netflix because of streaming and I prefer to look at streaming only. When I joined netflix I got a DVD and didn't return it for a year. I didn't want to return it because I didn't want to get another DVD. In search results I never wanted to see the DVD results. I wanted to see what I could watch now. Content is such a key part of this. If the streaming service had the same or more content than the DVD business, nobody would care. But since they are still building that collection and struggling with content owners, people are freaking out.
Time will tell whether this was a stupid idea for the market at large. As a streaming customer, I'm indifferent. As a tech pundit, I think it was an important strategic move and I applaud Netflix.
I think you're throwing out the baby with the bathwater. There are straightforward technical solutions they could implement to address your complaints, but for those of us that aren't so extreme, there's no easy solution to the way they're breaking our desired usage.
I am a Netflix customer. I don't care what they do with their DVD collection. The only reason I occasionally ordered a DVD is because it was available in my subscription. Since the split, I've canceled my DVD service. I hate DVDs. I don't want to wait for them, I don't want to handle them, I don't want to remember to mail them back.
To me the split has zero impact on my perception of the value of the streaming service.
I looked at Amazon about 6 months ago, and there was no content of interest there that was not also on Netflix.
I am also a Netflix customer. I too canceled my DVD service. I haven't ordered a DVD from Netflix for months.
I had previously thought that if I ever did want to order a DVD again (for something not available on streaming), I could just reinstate the DVD service and order it. Now, it appears, I would have to sign up with a totally different system to get the DVDs. I'm probably not going to bother doing that.
I am baffled as to why they would split the DVDs into a different business altogether. It's a different product, sure, but need it be a whole separate business? I trust it makes sense internally to Netflix, and I presume it is projected to be more profitable. And if so, then I can hardly blame them for doing it. But as a user, I don't get it.
^^ This is why Netflix is fubar'd. Totally internally looking -- not giving a shit what it means for their customers.
Yeah, we all love paying two bills each month, having to search for content two places, having our ratings queues forked and kept out of sync. Thanks, we're all so glad to hear that it's easier for you.
We'll make it even easier: find new customers. We're gone.
I would be interested in what you find as a good replacement because I might consider a switch if it were good enough. I just killed my cable and that was costing me ~$70/ month.
No, we'll be dropping our Kwikster accounts immediately and looking for an alternate streaming provider (cough Amazon cough).
Honestly, it feels like this board is being trolled by Netflix employees or paid PR, who see "no" problem with this move. I don't know a single person in meatspace who thinks these changes are good. Not one.
And people who were putting up (but unhappy) with the 60% price hike are now actively looking to switch.
Hastings is destroying shareholder and customer value at a pace only matched by HP's CEO at this point.
I hold my employer to certain standards and I do not defend anything they do automatically - for instance, I thought the way the plan split/price hike was communicated was just awful. So I'm not trolling.
When I first heard this plan many months ago, my immediate reaction was to look for another job. I have, perhaps obviously, decided to stay. One of the biggest reasons I've decided to stay is that I believe Reed is one of the most honest, hungry, and intelligent CEO's around.
These changes will cause short term pain, but I honestly believe the products will be much better after the split.
I'm disappointed by the remarks in this thread that don't give the Netflix team credit for understanding their customer base. The CEO gives a credible rationale for the split: two different kinds of business. DVDs for the long tail, streaming for convenience.
Given their machine learning and rating expertise, I bet their analytics gave them a good understanding of just how different the two mediums are. I'll bet people's streaming preferences are rather different than their DVD preferences. Probably so much so that there's less predictive value across mediums than some people in this thread seem to expect.
> I'll bet people's streaming preferences are rather different than their DVD preferences.
I'll bet they're virtually identical. Think of all their customers that have both streaming and DVD plans. What movies are going to be on their DVD queues? The ones that aren't available for streaming. Nobody puts a movie into their DVD queue because they want to wait two days before they watch it.
You're right, there is a constraint for most rational customers:
X is in streaming => X is not in DVD queue
The thing is, the set of stuff available for streaming is not very large compared to the set of stuff on DVD. So the applicability of the constraint is small.
And, I think all the constraint tells you is, don't suggest titles that are available on streaming for someone's DVD queue. I think affirmative suggestions are much more interesting.
To me, your idea that people's streaming preferences are "virtually identical" to their DVD preferences seems like you didn't mean it seriously. Hyperbole?
My own streaming habits are totally different from my DVD habits, not only due to limited availability of streaming titles, but also due to ingrained expectations. It's kind of like TV versus movies.
But its not a new company. Its the same organization headed by the same person with the same employees as before. There is just some different branding.
The new branding includes a CEO and it's being billed separately. Not to mention being completely separated online (no shared ratings or searching). It's a different company.
He's not "owing up", that's pure PR. This was hatched back in May, and it was stupid then, stupid now, and will be stupid 5 years from now when what's left of Qwikster is sold off in a fire sale and Netflix shareholders start wishing they had bought Yahoo!
Qwikster is a joke and will be dead or acquired in 5 years.
And Netflix streaming is not ready to carry Netflix forward. We won't be subscribing to Qwikster, and we're already looking for alternatives on the streaming side -- most likely, Amazon, who would never do something this idiotic.
Your statement would be stronger with some backup argument and justification. Why is it a joke and why will it be dead in 5 years? Why isn't acquisition a winning outcome?
Qwikster is a terrible name, and this is a terrible move.
Hastings is now in competition with that guy running HP to see who can destroy their company first.
Maybe Ballmer will get in the game and spin off Windows/Office from Microsoft, and rebrand them "Facetown", while proclaiming Bing to be the future of the company.
Unbelievable.
Update: I predict Qwikster is dead and buried within 5 years, and someone else pushes past Netflix on the streaming side to be the leader there.
This move is unbelievably stupid. Any trust I had in Netflix over the long haul is gone.
I've been reading all the comments here and at Reed's blog to understand what everyone has to say about the split. Internally, we've known about the split for some time now.
Why do you think this is a terrible move? Your comment has a lot of unflattering comparisons, but doesn't explain why the move is stupid.
Also, you're probably right that DVD as a service will not last forever, and Reed understands that too (he mentions this in the post as well - http://blog.netflix.com/2011/09/explanation-and-some-reflect...). DVD service may not last very long, but right now, it is a growing business.
It's a terrible move because you're splitting the business on an irrelevant implementation detail. There is one thing at the root of all this from a customer's perspective: watching TV and movies. Netflix as a unified DVD and streaming solution facilitated this well for reasons already mentioned; you could stream if streaming was available and desirable under the circumstances, but you could wait for the DVD if you had a good reason to do so, and these services both cooperated to enhance the customer's single experience and goal of watching movies.
There really is no reason this should not have been a significant internal restructuring offering the necessary resources to both divisions instead of a major public split like this. It's simply not a customer-facing issue. Now, as DVD becomes less and less relevant, Qwikster is doomed to an eventual shutdown, its users will lose their data (recommendations, rental history, reviews, etc) and/or Netflix will have to merge it back in to its database anyway, and there are just a myriad of other inconveniences from the user side.
Essentially, you broke something that was working well for its customers for the convenience of internal management and politicking.
Just to share my personal experience: My wife and I have been Netflix customers for years. Streaming is pretty convenient for us, but two major problems: 1) lack of content and 2) lack of subtitles / closed captions. Captions are important because we watch movies at night, after the kids are in bed. That means we keep things are quiet enough that you occasionally miss a line of dialog. Because of those two issues we're back to DVDs in the mail. Here's my point:
While the services were integrated we could play with the online service (wait for it to improve) while still getting DVDs through the mail. It didn't cost any extra to try a streaming movie or two. Now that they are separate, checking up on the online service has a much higher cost, both monetarily and in terms of effort. Personally I'm disappointed, I liked streaming a lot, but for us it just wasn't quite there yet.
As others have said, the two services are complementary. I might like to know that I could watch a movie instantly instead of waiting for it in the mail, even if that's what I'd planned to do. Or that I could get a DVD in the mail because it isn't available for streaming.
As a customer I feel Netflix cares more about promoting streaming than keeping me as a customer. Rather than holding the door open so I can take my time converting to online content, I'm being pushed. Maybe right into a the arms of a competitor, because I'm not feeling the love from Netflix.
I think Netflix has basically two kinds of customers: mainstream customers and long-tail customers. The mainstream will be fine with this, but for those of us who like to draw our content from the long tail, it sucks.
My wife and I were on streaming-only for a few months, but last month I upped our account to streaming+DVD again for just this reason -- the stuff we wanted to watch just wasn't available, and didn't look like it was going to be anytime soon.
Because the two services work well together. There are lots of movies and shows that you can't stream, but you can get on disc. Your data about what discs I rent improves your recommendations on the streaming side; and having one UI for both services makes me more likely to get them both from you. If Qwikster fully splits from Netflix, it'll have to compete on its own with other disc-only solutions.
Maybe you're going to radically improve your streaming library Real Soon Now; but, if so, the time to split is after that improvement, when streaming can better stand on its own.
It's a terrible move because how I go about finding a movie to watch is very important to me. I want to be able to search for movies, browse a genre, or rate movies and get recommendations all through one easy to use interface. I will decide whether I want to stream the movie or wait for it in the mail. How you handle it internally I don't really care. I'm even willing to pay for the services separately.
Now, let's compare to cable. If I sign up for Comcast cable with HBO, I would also pay for the services separately. But, I don't want to have two boxes with two remotes sitting next to my TV just so I can watch HBO separately.
When I log into amazon.com I can buy physical items like DVDs, or purchase digital items like eBooks or MP3s, or I can stream movies. Maybe they're handled internally by different departments. I don't know and I don't care. All I know is that I can do everything from one interface with one account. I don't need to go to amazulu.com to watch movies and kindlebooks.com to buy books.
Simply put, convenience is a HUGE value. Something that I am willing to pay for. I didn't even sweat the Netflix price hike because the value was still there for me. But if you're going to make it HARDER for me to find and watch a movie, I don't see how that's worth paying for.
It would be a debatably good move if the streaming catalog were deep. It is so shallow that during the DVD+streaming price hike/split, I canceled the streaming portion.
And, note that I'm setup perfectly for streaming. I have no TV/cable/dish. I get all my content from downloading TV and getting movies from you. If I could get TV from you on streaming, I'd abandon torrents.
It is really horrible watching Netflix implode like this.
I've been a Netflix customer for over 5 years.
To me, Netflix is a company that does DVDs-by-mail well, and also trying to grow online streaming.
Online streaming as it is right now is a baby.
It grows fast as every healthy baby does, but it can't be an adult yet as DVD business is. May be it will grow enough in the next few years, may be.
So when Netflix announced separate price for DVDs and streaming, i cancelled streaming immediately, because it is not ready for me yet as a separate product I'm willing to pay for.
It was good enough to have it as an addition, as a nice extra feature, but not good enough to pay extra.
So, in my opinion, there is (was?) one thing that Netflix is(was?) doing well, and now, what is this company doing anyway? What are their business? Oh, it's a video streaming over the internet, just like Hulu or Youtube?
From the outside it appears that Netflix is reacting late to market forces and business partners. Netflix had seemed to be growing in size and more importantly 'clout'. The 'media biz' is run on relationships, trading huge favors and controlling vertical markets. If Netflix has little influence or trading tokens then it will eventually be marginalized. Blockbuster seemed to be just just what it's title implies for a while, now it seems more like a blip.
Netflix is wrecking the huge advantage they have. Now it will be just another streaming company. Netflix has leveled the advantage it had, opening up huge opportunity for competitors.
And the kids don't care at all who they get the shows from.
I expect Amazon to continue to aggressively compete in this area, not to mention Apple and someday, Google. Netflix is giving away their core advantage -- a huge content library and DVD/Blu-ray backup for anything not-yet streamed. No one else has that. Now they're just like everyone else.