Netflix Spins off DVD-by-Mail Service into Qwikster; Will Add Video Game Rentals

by     Posted 2 years, 219 days ago

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Netflix has faced a revolt ever since splitting its DVD-by-Mail Serve and Video Streaming Service into two separate price plans.  I argued at the time that this split was necessary to keep the company competitive and that people were free to leave if they felt priced out of the service.  Now I feel like I’m being punished for sticking around.

On the official Netflix blog, co-founder and CEO Reed Hastings apologized for the way the announcement of the new pricing-plan was made, and further tried to explain why Netflix had adopted the new pricing scheme. He then revealed that the company will spinning off its DVD-by-Mail service onto a new site, Qwikster.com.  Hit the jump for more details and why this new development won’t win anyone back and only irk those who stayed.

Here’s an explanation video that shows that Netflix couldn’t afford something more professional to announce their new service.

If you don’t want to watch Hastings drone on or you don’t care what the new envelope and Qwikster logo looks like, here’s an explanation of the service from the Netflix blog:

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, and now that DVD by mail has its own team, we are finally getting it done.  Other improvements will follow.

netflix-envelopes-mailedSo it’s re-branding, except not really since Netflix will keep its name for the streaming business.  It’s basically an acknowledgement that the DVD-by-Mail business will eventually die and when it does, Netflix wants to keep its name with the most-likely-still-alive streaming business.  However, getting to rent video games is pretty nice, right?  That way you can drop your Gamefly account and keep everything under the Netflix roof.

Except you can’t.  Netflix’s roof only covers streaming titles now.  Qwikster gets its own roof and the pointless division will provide a needless headache.  Here’s how it will work:

Another advantage of separate websites is simplicity for our members. Each website will be focused on just one thing (DVDs or streaming) and will be even easier to use. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated. So if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa.

It’s ironic that in trying to apologize to customers for trying to sell the new pricing scheme as a something wonderful, Netflix is once again trying to spin a negative into a positive.  I didn’t have trouble keeping track of my DVDs on Netflix.com.  Plus, Netflix knew when a DVD was now available via streaming and automatically added the title.  That’s gone now.  The integration has been removed and then we’re told that everything is simple because we have to deal with two websites instead of one.

This has been a bad past few months for Netflix.  I didn’t mind the new pricing scheme, but losing the Starz negotiation was an embarrassment for the company and a troubling sign that more licenses may expire without any hope of renewal.  Now they’re making matters more difficult for those who stayed on board with a plan that won’t win anyone back.  Customers didn’t leave Netflix en masse because they had an issue with the name or that they couldn’t queue their DVDs on a completely different site.  They left because the price was too high and there’s really no solution for that.  Adding video games is a smart move because you can siphon off Gamefly customers, but the other changes are baffling to say the least.




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  • Kurt

    The pricing didn’t bother me, I’m actually paying a little less now then I was paying before. However this just pisses me off, I don’t want to go to another site, I don’t want to make a new Queue on the new site. The only thing I like about this hole giant pile is that they are adding Video Games. I’m very tempted now to just walk away.

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  • Jason

    Thanks to this baffling decision I just ordered a roku box for amazon prime streaming and cancelled my netflix account. I have no idea why the shareholders have not replaced this clown.

    • sklar

      shareholders are part of why they will go under, the shareholders want to make more an more money and do not care about the CO or us, if u ask me shareholders are why alot of the co go out of biz

  • Elitist Prick

    Ugh, this is excessively dumb. For me at least, the whole point of Netflix was being able to get, for example, the physical copy of a Criterion release of a Kurosawa film (an experience that can’t be effectively replicated by mere streaming) and a streamed version of a TV show or some disposable action movie on the same service. Now, why even bother?

  • drmar120

    The whole point of this is to get rid of the DVD by mail biz. It’ll be sold off within a year or two, then probably die a gruesome death in the hands of it clumsy new owners. Hastings has wanted this outcome for a long time and this approach lets him achieve it. The thing that po’s me is the hypocrisy of his utterly fake apology. Why doesn’t the guy just say: Sorry DVD fans, we’re preparing to get out of the DVD by mail biz. Just why do these corporate plutocrats try to make us think they’re anything but cold, calculating SOBs?

  • Joel_Goodsen

    Congratulations, Netflix. I did not care about the price change, but forcing me to sign up for your new Qwikster to get DVD’s is going to lose me. Video games is the incentive? I don’t play videos…so you lose. Whoever is making decisions at Netfilx needs to be FIRED. NOW.

  • Mike

    I do believe it was the new pricing that put the final nail in the coffin. Netflix has and will continue to lose more subscribers in the coming months. Netflix was bound to lose the Starz contracted since more then likely the company will start their own VOD service. But I do agree with other commenters the “apology” if you want to call it that was crap. Good luck Reed trying to pitch your idea to share holders.

  • SciFan

    Reed Hastings must be surrounded by YES people because he is running Netflix into the ground.

    Somebody, say NO to this guy.

    What a shame.

  • Ringbearer1420

    Quicksters sounds like something a prostitue would offer. Netflix sounds like a online video rental site.

  • Markus

    It’ll be interesting to see how their game system compares to Gamefly. Gamefly has games available on day-one release, and after x number of months you start earning 5% or 10% off used game purchases. the 1 game plan is $17/mo, I want to see what “Qwikster” will offer.

  • Judson

    Everyone threatening to leave Netflix now will be back in a year or two.

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  • rbevanx

    When I read this, I thank God that Lovefilm is in the UK and not Netflix.

    Streaming, games and DVD’s all in one place and backed by Amazon.com.

    Netflix will never get their dirty hands on the UK from them.

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  • junierizzle

    It woudl be cool if you can STREAM EVERY SINGLE PIECE OF CONTENT THAT THEY HAVE. I mean even the DVD stuff. But you can’t.

    I get that they think the future is streaming, but there is no way Movies Studios are going to put all of there stuff up and lose all that Blu-Ray money.

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