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Netflix is spinning off its DVD-by-mail service so it can focus
exclusively on its streaming video service. What kind of a moronic move
is that?!?
My wife and I love Netflix, and I was thrilled when Netflix added a
streaming app for Wii. No more waiting for DVDs to arrive in the mail -
or not, as about 95% of what Netflix had on DVD wasn't available as
streaming content back then.
Things have improved significantly since then, but there is still a
lot of DVD material that Netflix doesn't stream. For instance,
Roots and The Wild, Wild West TV series only come on
disc.
It was bad enough when Netflix decided to nearly double rates for
those who want both discs and streaming content, going from $9.99 (it
was $8.99 a year ago) per month to $15.98. But because of the amount of
material not available via streaming, and because I'm hooked on
streaming content, we bit the bullet. $16 a month isn't an unreasonable
entertainment budget.
But then Netflix announced Qwikster, a new name for the service that
gave Netflix its start. According to the announcement, Qwikster will
have a completely separate website, separate billing, and separate
queues. And that means Netflix users will have to manually enter dozens
or even hundreds of disc-only titles to the new service.
C'mon, guys, give us a break. Use those powerful computers to do
something more than just stream video and track your users. At the very
least, automatically transfer our disc queues from Netflix to
Qwikster.
The Beginning of the End for Netflix?
Netflix decimated Blockbuster with its DVD service, and adding
streaming video was a brilliant move, especially when there was no
additional cost for the service.
However, success went to someone's head, and they really didn't
think through the new business model.
With the old model, discs and streaming content came from the same
source. You could check your disc queue, discover that this movie or
that TV show was now available as streaming content, watch it that way,
and remove the disc from your queue.
With Qwikster, you're not going to be able to do that. Here's the
convoluted new process:
Check you Qwikster queue for movies you're interested in.
Pop over to Netflix to see if they are available as streaming
movies. You'll have to do this one movie at a time.
Go back to Qwikster so you can remove streaming movies from your
queue.
No more unified queue. If the extra cost of DVD service didn't turn
off enough Netflix users, the extra hassle of coordinating two separate
services is very likely to do it. I know we're not at all happy about
the prospect of having to enter our queue all over again.
Netflix was a raging success, just as AOL was once upon a time. And
just as AOL thought it could do no wrong, so does Netflix today.
Investors certainly think so, as Netflix stock lost a year's worth
of gains since announcing it would spin of Qwikster two days ago.
(Netflix hit a high of $298.73 per share before announcing its new
pricing model, was just under $170 late last week, and after Sunday's
announcement, it has dropped to $130.)
Separating two services that overlap as much as this won't do
Netflix any good, although it does provide a real opportunity for
competing disc-by-mail and streaming video services to scoop up a lot
of disgruntled Netflix users.
Other than humbly admitting it made a stupid move and canceling
plans to spin off Qwikster as a separate company, Netflix is in for a
world of hurt.
Dan Knight has been using Macs since 1986,
sold Macs for several years, supported them for many more years, and
has been publishing Low End Mac since April 1997. If you find Dan's articles helpful, please consider making a donation to his tip jar.
Links for the Day
Mac of the Day: Power Mac 6100, introduced 1994.03.14. The entry-level first generation Power Mac had a 60 MHz PowerPC.
