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Robert Emmerich

Lightbulb moment.

Well this explains that really crappy circle graph showing most members belong to EITHER streaming only or DVD only, with some overlap, when actually DVD ONLY is a small part of their business. The graph justifies the split into 2 companies. The fact is they are daring 12 million subscribers to choose streaming or DVD, who the [email protected] wants two accounts to manage? You think they had people quitting before over simply a price increase? I'm expecting mass exodus now.

Will Reynolds

Talk about clueless. No, it isn't that the announcement was disrespectful. It's that the content of the announcement sucked.
"Netflix member since July 2005"

Not anymore. I guess I'll be getting one DVD at a time on Qwikster...for now. The biggest benefit of Netflix is that I could get most any movie. I can't get that out of their very limited, and often crappy selection of streaming movies. I'm most certainly not going to pay double for it.
And now six years of rental history, ratings and reviews won't transfer over to Qwikster? Is this company run by monkeys?

James Wilson

had it on my schedule to evaluate adding dvds back , but not now nope no way.

Fred Talmadge

As one who only gets DVDs in the mail all these changes have been to my benifit, lower pricing by not subsidizing streamers and still get quick turn around. I don't understand the split, and the name is kind of silly but that hardly matters.

John McFarlane

So I now have to independently mange two cues of two hundred plus films, minus the ability to have titles automatically transfered to my instant cue?
You know, I was happy to pay more for a service I thought was genuinely worth it. Even at the new rates, you can't beat the value Netflix was offering. The combo and integration of streaming and DVD is what made this service unique. But now that Qwikster (and what a shitty name, btw) will be a separate entity, what's to stop me at looking at alternatives for each service?
What you've done here is basically pussy out and undermined your own product. Nice one, mate. Nice one.

Susan Benzer

Another long time customer thoroughly disgusted. If it weren't for the fact that so many of the movies in my queue are not available locally in libraries, I would dump the whole thing now.

I've watched my DVD queue move items nearly daily to the Saved section because they won't buy replacements. More of the items now have Short Wait in the Availability column. They've neglected DVDs for streaming which still sucks. Hulu has better streaming - the quality is better and they have more items with CC. But streaming still is NOT comparable to DVD quality. And with my ISP placing limits on usage, the emphasis on streaming is problematic.

And games? Why don't they just buy Gamefly and maintain it separately too? I don't need my DVD money going to buy games (which I will NEVER borrow). They're spending less and less on DVDs and now they'll be buying games instead.

What drugs are they ingesting there at Netflix?

Nialla42

Qwikster sounds like the name of a convenience store. It doesn't make sense to separate the companies and the queues when some are using both. I smell sell off.

I went DVD only with the price change. I never used streaming, because I don't have the bandwidth to do so. I'm in a rural area, so RedBox and the like would be an hour roundtrip. Paying a monthly fee for delivery is a lot cheaper than the gas money and my time to make that trip.

Netflix also has a wide variety of DVDs versus local rental shops that aim for new releases to make more money. I'm not in a huge rush for the latest blockbuster, I'm often not interested in them at all, but there's often not much else to choose from.

I've been wondering if streaming is more about having stuff there people will watch simply because it's there instead of having what they want, due to contracts coming and going? I've seen a lot of comments along the lines of people being more casual viewers of streaming versus specifically selecting DVD titles.

When I could see what was available for streaming, I'd estimate only 10% was, which isn't enough. So I'll be a reluctant Qwikster customer (still a stupid name, did the folks who renamed SyFy and Cloo have anything to do with it?), at least for a while, to see if it's worth anything. If not, interlibrary loan at the local library might be worth it for older titles I can't find elsewhere.

moviegeek

Qwikster?!
That's as cheesy as Xfinity.

I'm done with Netflix's DVD plan, I don't want two separate websites and bills.

CJ

Anybody that knows about business knows that the next step after cost-based "unbundling" the pricing of your business products, is to form separate entities, in this case two web sites, so you can provide better service and/or divvy up your business resources. The ultimate objective might be for Netflix/Qwikster to sell one of the business and get out of that product business.

I have no clue why Reed is apologizing for sound business decisions.

Grzegorz Lecki

well, that does suck... Also, looks like Block Buster will now become better value since their bluray and games are all single price.
Netflix charges extra for a relativelly small selection of bluray, now extra fee for games as well.

MrEks

Everyone is focused on the clumsiness of the marketing and customer experience, but there is a business strategy here. Shipping out DVDs is a heavyweight business: you have to have a large inventory of discs, you have to store them in distributed sites across the country, you have to have a lot of employees stuffing envelopes and then opening returned envelopes, you have to pay a lot in postage, etc, etc, etc.

Streaming is, in comparison, a very lightweight business: you do need a lot of network infrastructure, but once you have that in place, you're just shipping bits over the wire. It's very similar to the software business: it costs a lot to develop your product, but once you do that, there are next to no incremental costs to make and sell one copy or one million copies; it is more or less pure profit.

Coca Cola did the same thing many years ago. It separated out its heavy bottling and distribution side of the business into Coca Cola Enterprises, leaving the core business free to focus on the comparatively light business of making and selling Coca Cola syrup.

So Netflix is looking to get rid of its heavy DVD costs and move to a nearly cost free streaming business. This is just the first step towards that. There's a reason why there will be little integration between your Netflix account/queue and your Quikster account/queue: to make the entire business easy to completely jettison. Soon enough, Netflix will sell Quikster and be out of the DVD business completely.

Rballen48

I just canceled my Netflix account. If they don't have the customer first in mind, they don't need my $35 a month. Too bad, they really had a great service with the streaming and DVD together. Goodbye Netflix.

Robert Allen
Urbana, IL

Bobby McDaniel Jr

Game Rentals! How much will the increase be this time.

Clay and Deanne Broughton

I am floored by what I have learned today. I had no idea my rates will go up today. I rent 3 dvds and stream and when it was announced two months ago our rates weren't going up they were just splitting off a streaming only. The founders non explanation explanation is more of the same. Does he listen to anyone or is he so egotistical that whatever he thinks is right is right? He may have brought this baby into the world but at this rate he may also take it out too. It was a blow that Starz left the fold and fewer new releases but we said ok. The huge increase for some two months ago was blunt too. But today that takes the cake. Now I am paying 4.00 more for less? How does that make sense? He also doesn't explain when this all takes affect. All I get from this is I will need more browsers open and it is going to be more of a hassle because they now want to add games? I am not renting games I am renting movies. They should have spun off the games. But much like network tv the youngest audience seems to have the CEO's by the nose ring. I don't get it since I know I watch more tv and spend more money on products than my adult children. I am their target market whether they want to listen or not. I just bought another newer Roku and wished I had just bought a cpu to stream to my older instead. I now have a reason to seriously find what options I have out there and keep my eye out for a better company. The whole reason I avoided cable was due to the sneaky practices and well Netflix is not different from what I am experiencing now. My billing date was today and just changed my 3 dvds to 2 for now to avoid a 4.00 increase on top of the other increases which will buy me some time to see if another company wants my business and willing to treat me better and actually has a logical explanation. None here at Netflix for months now. What a huge fail by management. It is almost comical. Dude seriously are you serious?

Gregory Zingler

Does anyone see how this guy is smiling, almost laughing while he "apologizes"? What a jerk, and now I have to go to two different websites to manage my queues. F***ing fantastic, thanks netflix for continuing to diminish my previously enjoyable experience with your service.

Clay and Deanne Broughton

Also Netflix emailed me this morning about the changes and told me to go to their blog to make comments. You can only post a comment if you are on Facebook. Oh give me a break. Not everyone is on Facebook either and I am just fed up with Netflix approach to their consumer base. Also they wanted me to clear my cookies and cashe to post a comment. Guess what I lost my comment and started over then to learn I have to be on Facebook to post. Totally lame for a blog. OMG who is this founder listening to if anyone at all? Certainly not us consumers. Thank god there is this site to post to. Also when I called Netflix this morning the staff had no idea about all of this and they are just now learning some. They may have figure out how to mail a dvd but they are clueless on how to deal with customer base. Astonishing really.

Btoy

I guess this explains why they ditched the saved queue on the instant queue.

Karen Lee

Wonder what the Wall Street analysts will make of this move. Will Reed and Co regain the value of their stock that plummeted? Will it drop further? Can they cash in stock fast enough to keep some of the money their loyal customer base (prior to the 60% price hike) gave to them?

We'll have to wait and see.

I've only been a Netflix customer for a bit over 3 years. When streaming came around I couldn't use it due to my OS. When I built a new computer with Win 7 I started to look at some streaming movies/TV. Lousy quality on Starz was the first thing I noticed. No Starz went into my streaming queue.

I cut the cord in early 2009. Had DirecTV, no over the air TV in my rural mountain area and the local cable co, TW, has a terrible reputation up here.

I have an analog TV still as I'm not watching TV itself, but DVD's look just fine on it and I'm not into BluRay at all.

When notified of the price increase to come I sat down at my PC and watched the rest of 24 that I hadn't gotten around to yet and deleted the rest of my streaming queue. I didn't mind the money, it was the tone of the thing. I upped my subscription to 3 DVD's out at a time and filled up my DVD queue with stuff I would like to see while leaving the balance of the stuff available (before) in both streaming and DVD in the queue.

Now this new email saying in effect " customers bend over and hold your ankles".

My response is to increase turns of what I want to see that's in my queue and continue to do so until they either sell the Co., the PO stops delivering in a timely manner, or I've seen everything I want to see. Nothing is going to sit around waiting to be watched.

Living in a remote area with no over the air TV or radio also means living with no real speed from the DSL ISP up here. Streaming is always difficult. As it is so slow, caps will probably not be forthcoming to us.

Streaming was not a big loss to me, and the streaming titles mostly sucked anyway, unless it was old TV stuff.

Losing DVD's by mail would be a big loss to me as I'm mostly watching older titles, have absolutely zero interest in "new releases" as so many if them are not something I'd want to see, let alone pay to go to a theater to see.

New releases of material not on DVD before are another matter entirely.

Netflix customers could always start torrenting I suppose, many choices out there both new and old. New releases hit the torrents long before release on DVD dates or the same day, depending on the ripper's access.

Seems a shame to drive so many away who have been happily getting legal content.

Il_guru_davinci

I guess I'll be dropping Netflix in favor of Quickster. I have two 8 out at a time plans. One has streaming and blu-ray access and the other doesn't.

Streaming doesn't come close to the selection I can get on DVD. All streaming is good for is tv shows and most of those are on hulu plus which I already subscribe to.

Having two separate sites is just a hassle for the users. Instead of one site where I can see my viewing options, I now have to diligently monitor two sites in order to prevent doubling up the same film on both sites.


Tsrblke

Everyone seems to assume that this is because Netflix is about to spin off the DVD company (i.e. let it die in the hands of someone else) I'm less sure about this. I will be curious to see how the stock ends up being handled. Presumably as a wholely owned subsidiary, NFLX would still contain quickster.
BUT, and here's the big but, by splitting like they did, Hastings has allowed another company to come in and buy the streaming service. I know what you're thinking: "He's nuts, how would splitting help that?!"
Take a large company currently trying to focus on digital entertainment (like..say..Microsoft) who may be interested in a company (like Netflix) but not want the huge infrastrucure that comes with the DVD side of the business (the shipping centers, massive physical inventory, ect.) There's no way to really buy the company and not pay for something you didn't want (i.e. the physical side). Now (in theory) there is. MS (or any other company) could swoop in, buy Netflix, without buying Qwikster (or whatever it's called) and expand their digital offering.
Now I'm not saying this is going to happen (and no I don't have any inside information :P ) but I am curious to see how the next few months shakes out. That being said, I'm glad I don't own NFLX stock, because it's in for a wild ride. Even if a potential sale is worth tons of cash, the company that'd be left would be worth almost nothing in 3 years.

Chefremy

Reed said that there would be no additional price increase, but what about people on one of the limited plans? We were not impacted by the last price change because streaming and mailing were not split in these plans. We received 1 movie a month and 2 hours of streaming for $5, but he makes no mention of the financial impact to these customers with these changes.

Mark Van Dyke

This all really sounds like last minute, decided over the weekend, hurried and over-caffeinated hubris. It really takes no effort to check the web to see that the qwikster domain was still up for sale last month and the most recent record change was yesterday (9/19/2011). So much for that, Reed!

In any case, the name is stupid and easily mistyped, which will lead to problems. And really, the name relates not one bit to the content that is proposed for it. They should have chosen something like "Discster", which sounds a bit like Dexter, America's favorite serial killer. That surely would be more apropos... considering what the Netflix heads have been up to.

Two different services, two different charges, and two different movie databases. What's the benefit for me in that? None. The benefit for me in the ability to go to one place, browse through one database of titles, and pick and choose what I want. Separating into two databases doesn't double the work for me, it more than quadruples it.

I'm really getting sick of the Netflix heads. If I have to use two different services I might as well use two completely different services.

As for the "apology" by Reed Hastings, I think we all know he is talking out of his hat.

If they knew what they were going to do beforehand when raising the prices and didn't bother to disclose to the subscribers, then it is nothing more than bait-and-switch.

Leon S

I guess I am getting too old for this, because I am at the point where it just seems easier to cancel Netflix and watch what's on TV. It sucks, but it's easy enough to find.

Timarthur

I'm one of the customers that is a bit put off by the fact that I will need to open yet another account to have a service that currently exists. I can see how Netflix feels the need to fork their distribution models, but asking loyal customers to maintain a separate account for something that is already integrated is just poor.

The name Qwikster isn't the best, but I am fine with it. I do foresee them giving GameFly a run for their money after games are added.

Lethargicj

It's really pathetic what an entitled society of brats we've become. Boo friggin hoo. Your DVD envelopes will have a new name on them. Let's all cry and whine about it. Grow up and get over it ya babies.

Netflix is and will continue to be an amazing service that only a few years ago was a pipedream. It reminds of the Louie CK bit about how people do nothing but complain about flying, never realizing what an amazing miracle it is to be hurtling through the sky in a big metal tube. It wasn't that long ago that we were having to drive to a Blockbuster to get a movie, now we get movies pumped directly into our TV all we want without leaving our couch. We're living in amazing times and the technology is just going to get better and more amazing in ways none of us imagine yet, and the entire time that happens there will be a group of entitled babies crying that it doesn't live up to their unattainable sense of perfection that all things must meet at all times. Go screw ya whiners.

Clay and Deanne Broughton

I think maybe I need to stop streaming the old content Netflix provides and cancel my streaming and dvd service. They have lots of documentaries and foreign films but not what I really want to see.

Instead rent current flicks from Blockbuster or use Amazon VOD or other online service and just use my Sony blue ray dvd player to stream with. Sell my Rokus and invest in one of those color nooks and start downloading books and magazines. I don't think they make you wait weeks for that content.

Watch my local tv and reality shows and go to matinees when I have an itch for a good movie instead of waiting for them for months to be released on Netflix. The waiting times for dvds that are popular are weeks and weeks and no one talks about how lame that is. No you don't just put movie in a Q and then they ship it. It feels like they have two disc of one movie and it takes forever to get them. I think I am going to cut the Netflix umbilical cord and fill my hours with content I am really interested in not just what Netflix has to offer and get it on Netflix time schedule but on my own.

Use Redbox at local grocery store again. Who knows maybe someone else will come forth to fill the gap Netflix has just now created.

I think we need to discuss options here and good ideas of options to make it clear we do have options which clearly the CEO assumes are too limited and we are stuck with his lame policies. I hate monopolies.

Jessica County

Less apologies and more streaming titles please. I said most people would quit if they didn't get more titles and I am not noticing any improvement. People are leaving.
More streaming TITLES please.

Ailu Rophilia

I think I have an idea why Netflix is doing this. Over a year ago, there was a news item about the Postal Service requiring Netflix to revamp their packaging. This requirement would come at an enormous expense for Netflix. And since their streaming is far more profitable, why not cut the rope loose rather than have half the business crippling the rest of their company? Sacrifice it, and keep the stockholders happy.

Nathan Hiatt

Settle down guys. This is a calculated move. I hate the name, but there is a method to their madness. Disc is dying, it's debatable how fast it is dying... but I don't think anyone can argue this. The disc by mail is going to be dealt a MAJOR blow soon. Everyone will feel it. The USPS is in rough shape. I've read they are targeting eliminating Saturday deliveries and closing multiple distribution centers. The closures of the distribution centers will extend first class delivery by a day. Lose a day and slowing down delivery... this is going to hurt the DVD by mail business profoundly(Netflix, Blockbuster, gamefly...).

They're renting games now too, c'mon guys the world isn't ending. I have no inside knowledge but I'm willing to bet in the next couple months we're gonna have a really good streaming announcement or two. Hastings preached action in that address, I severely doubt they would p-off their customers repeatedly in a 2 month span and then preach "actions speak louder than words" if they weren't working on some great stuff. Netflix didn't become awesome by accident. These are growing pains, Netflix will make up to everyone with some new streaming content. They were earmarking how much for Starz? Surely a studio will jump at it.

SPLG

Posted many many times that Reed Hastings was failing to listen to the lessons of Starbucks Howard Schultz - someone Hastings said he admired as a CEO.

Schultz had said and written that he learned the hard way about his arrogance with Starbucks' success and its subsequent stumbles.

I guess internet posters like myself don't carry a lot of weight in the executive offices at Netflix, but I should point out that the company routinely dismisses commenters on boards like this as a "small but vocal" minority of customers at Netflix. And yet so many of the things we say turn out to be right on the money...

David Mathias

I was on the fence about paying the higher rate for mailed DVDs when the price increase was announced this summer. Because canceling would have taken action I was most likely going to do nothing and accept that costs go up. The first thing I did after reading your apology was to log into my account and cancel my DVD mailing service. The second thing I did was google “Netflix streaming alternative”. In this economy the price increase was tough enough without being insulted in the process. I look forward to the Blockbuster/ Dish plan announcement on Friday.

Clay and Deanne Broughton

Here is one option to this mess Netflix has created. Since I already will have to manage two sites one for dvd and one for streaming how about considering Blockbuster for dvds. They have a 30 day free trial. For 14.99 you can get two dvds at a time and no charge for BlueRay ones. Also you can drop them off at Blockbuster store and get a free dvd at the same time. Hey you might hit it just right and get that new release when you return a dvd to the store? When you return that one to store they will release the next one in your Q. They also get new releases a month ahead of Netflix. Then add on the 7.99 for streaming with Netflix for the same amount you would pay for Netflix two dvds and unlimited streaming. If you don't drop off dvds to the store then it drops from 14.99 a month for 2 dvds to 13.99. Pretty much the same price of Netflix but you can get BlueRay disks and newer releases. The sales guys at Blockbuster say it isn't out of the realm of possibility that Blockbuster might take full advantage of the situation and do unlimited streaming as well since lots of folks are calling them. Also Blockbuster is going to make announcement this Friday. So stay tuned. So you could get a free month from Blockbuster right now and try them out and see how they operate. Or do it next month change your account settings and see if Blockbuster makes a run for Netflix's streaming customers too.

Lourdes E.

No worries as I do plan to CANCEL the service as well at the end of this MONTH!!! There is NO benefit in the streaming... the movies and the shows are OLD OLD OLD.... what were you thinking???


I liked the one movie a week for $10.00 and now it would be $16.00 for OLD stuff and one going OLD movie... NOT a good deal anymore SIR..... and losing STARZ too? again... What were you thinking????


An Unsatisfied customer,


LEGS

Marcus

Blockbuster, Hulu, Amazon, et al must be popping the champagne - it's the end of the Netflix dynasty.

Gobotron


I wonder if Reed Hastings has been hanging out with George Lucas and MySpace's Tom (or whomever really ran that site) and learning how to screw up a perfectly good thing. If they had to change the name, why not something similar like "DiscFlix" or "QuickFlix"? Whatever the name, two sites is completely stupid and an obvious attempt at damage control via foot-in-mouth. Even I can pay my cellular and home phone bills from one site. I just want the convenience of not having to go to the video store/kiosk, and the convenience of a huge selection, AND the convenience of a decent website to access, browse and alter, but now that is going away.
Now would be a good time for Amazon to add some content and especially add a queue of some sort. Heck, its app on my TV has everything completely mixed up.

Howardseth

http://cohenovate.wordpress.com/

Christina Decker

Don't care about the price increase. Do care about the MASSIVE inconvenience of separate queues, separate bills, separate ratings systems. I've rated 2700 titles, which I rely upon for suggestions, and now what? Also - THE STREAMING CATALOG IS NOT AS GOO AS THE DVD CATALOG. That's it. That's an objective fact. I have a hundred titles each in my DVD and stream queues, and no crossover. Streaming is 2nd tier, and always will be. I'm joining Blockbuster and selling my Netflix stock.

Clay and Deanne Broughton

Netflix only says how many customers have left like 1 million. What they neglected to talk about is how many customers changed their accounts to a cheaper plan. I bet a sizable number did this which would also impact revenues in a big way aside from customers that left.My guess is the impact from both have been significant.

After all is said and done how much profit are they actually making on their customer base? Right now they just lost a million customers and has that quick drop wiped out their profits for this quarter and next?

They didn't own the Twitter name at all for Quikster and the website name only very recently. It makes you think they are scrambling to divest themselves from the high cost of dvd mailing etc in order to keep Netflix alive after so many customers jumped ship after that ridiculous price increase. They decided this and announced it before end of third quarter before they even had the domain names secured. They can't possibly have the websites ready since they didn't say when this was all going to take place.

The irony here is only a salesman would believe his own baloney response and that is the sad part of this is the way the CEO has just made things worse and no one could stop him. Did he actually watch the video before he foolishly released it? Why didn't anyone or board of directors stop him? Where the heck is the board? Not a peep.

Yeah I am mad at the price increase and how he has made a good service bad but now all I can see is he is going to run this company into the ground much like all the other companies like Hollywood Video etc. Why does this sector attract such delusional leaders? Hollywood Video was great and they just denied the reality of streaming until it was too late. Blockbuster did the same. Netflix is headed down the same delusional path. By the time they figure out how they messed up and waited too long to give the CEO the boot it will be too late.

Clay and Deanne Broughton

Well Blockbuster may very well be launching their streaming service this Friday from reading articles like this:

http://business.financialpost.com/2011/09/19/dish-reportedly-set-to-unveil-blockbuster-branded-netflix-rival/

Friday should be very interesting. I intend to check out my local Blockbuster this weekend either way to see if they really have enough current releases in stock for when I drop off my dvds for a free dvd. If Netflix doesn't change course this week I am likely moving entirely over to Blockbuster and that includes streaming as well.

I have also read where Netflix CEO has cashed out a lot of stock this past year in the neighborhood of 46 million. The same amount that the company paid to buy additional stock at something like 230.00 ish per stock. He got out before he knew the stock would drop to 130.00ish now. All you Netflix stock holders got holding the bag for this CEO and now he is going to part it out and retire from the looks of it. Not a good sign with Founder/CEO cashed so much stock out in one year.

It sounds like the content holders were not going to sell to him and he knew it and cashed out and now separating dvds and streaming so he will have one game playing and my guess is he may very well let Netflix die a good death since no way to get the best content and keep the dvd part spinning for awhile. Now that everyone is streaming it should only be a matter of time where you will subscribe to Sony to get their movies etc. The middle man like Netflix streaming will not be needed.

But what content providers fail to get here is folks are strapped and they aren't going to pay Hulu prices for every content provider. WE already have a way too many passwords and user names to manage as it is. Many are not buying the crappy new tvs for a small fortune with poor sound etc with wireless only going to certain content providers. They wait like me and will do work arounds like hooking up computers to screens to avoid it all.
I think consumers have proven that they are holding onto their money until the prices come down and the servies are better. The question is how long can these tv manufacturers and content providers can hold out until their bottom line forces them to actually give consumers what they want.
What happened when HP sold their pads for 100.00? Everyone wanted one then.

Bobby McDaniel Jr

He Can Take His Apology & Shove It!

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