Monday, September 19, 2011

Netflix, Just As We Got to Know Ya, You Go Off Qwik

Apparently Netflix is in a big hurry to separate its DVD mailing line from its streaming line of business.

So quick of a hurry in fact, that in the same month that they raise prices and have separate options that cleave the DVDs from the streaming choices without a lot of explanation, annoying a lot of their subscribers, they're now going all the way and slicing DVDs from Netflix entirely.

The DVD shipment side will not longer be called Netflix but instead will be called Qwikster.

In an email just received from Netflix (and also viewable on their blog)here's the deal:

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 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 and 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 website is up and ready.

Netflix seems to be in a heckuva hurry to dispense with the DVD model that made it famous and changed the entire movie rental industry to instead concentrate on streaming.

My bet is the streaming overhead is lower and probably appears cooler as a competitior to Comcast's On Demand and other services.

Netflix doesn't seem to like stocking all the DVDs, which is why quite a number of Movies and TV Shows are not showing up as possible options via DVD, and DVDs disappear as unavaialble, and are only viewable by streaming.

Hard to say if this is a great business move for them, and I wonder if they'll be selling off the Qwikster brand in time. The name change certainly dilutes the goodwill Netflix has built up in the DVD business under the Netflix name. The name itself is not very unique or inspiring: Qwickster is too reminiscent of Quixtar, Amway's foray into online world.

For now I'll keep getting my DVDs from Qwikster, the DVD by mail service formerly known as Netflix or TDBMSFKAN - Hey they coulda called it FKAN-DVDs and gotten their view of the DVD by mail business across nicely).

With luck they will transfer my current movie queue without a problem as it would be a pain to restore. Lets see what happens next.

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