The Schizophrenia that is Netflix…er…Qwikster…uh…Netster…QwikFlix?

by Michael Sheehan on September 19, 2011

in Consumer Electronics, Gadgets, General, Opinion, Tech News, Video

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I have been a Netflix user for many many years. My account says 2007 but I actually started my service before that time, stopped and then restarted it. My family finds Netflix to be indispensable and we use both services, streaming and physical DVDs regularly. Every TV in our house has access to Netflix, in fact, we did some “cord cutting” with my children to only allow them to stream content (I love that they no longer see ads). Our Friday family TV nights typically consist of looking on Netflix for content to watch, whether it be a movie or a TV show or a documentary. It’s good stuff.

But now, Netflix is getting confusing and they seem to be doing their best at annoying their user base. And I don’t see this getting any better in the future. Recently, the things that are particularly messing with Netflix users’ minds including mine are the price change and the lack of content on both streaming and DVDs. To make matters worse, their communication policies have confused users and despite the “We’re sorry” games that they are playing now, the matter is only being made worse by the announcement that the DVD service is being sliced off into a new company with a new CEO – Qwikster.com.

Netflix-yell-sm

One of the great things about Netflix WAS (emphasis) the ability to have a consolidated way to get movie and TV content either via streaming or DVD. Now, as the two services are splintered off, it’s really unclear as to how much of a synergy there will be. You now will have 2 sites that you go to in order to maintain your movie queues. You will have two line items on your bill for each of the services. The companies have 2 CEOs with potentially different agendas. On the business side, there are now 2 types of contracts that need to be negotiated for content.

Netflix seems to be losing the momentum that it had in the past years. While it effectively drove Blockbuster out of business (although with DISH Networks acquisition of the Blockbuster streaming service there is possibly new competition), but mushrooms have sprouted up all over in the meantime. Let’s not forget about the powerhouses of Apple and Amazon. Their services are truly consolidated and they can leverage their power as being single entities in their negotiations regarding content media contracts. Also, there is the peripheral competition of individual media properties who are making their content available directly (think broadcasters: ABC, NBC, CBS, Fox, HBO, etc.). And let’s not forget about Hulu Plus, I don’t think they are out of the game yet. Oh, and of course, there is RedBox that does DVD and Video Games. There is lots of competition now so is it really smart for Netflix to be confusing end users and investors at this time?

Already, just because of the price changes and hikes, an estimated 1 million users have cancelled and their stock dropped 19 percent. Subscribers have the ability to go elsewhere now. A few years ago, this might have been different.

This past weekend, Netflix put the icing on their schizophrenic cake. Not only did the CEO, Reed Hastings, issue and apology for “not communicating properly,” they also used this announcement platform to launch a new company, Qwikster, and CEO (Andy Rendich) for their DVD service. Really??!! Seems a bit rushed to me. They didn’t even check to @qwikster Twitter handle before naming the new company.

You be the judge, here is there announcement done via video:

[iframe_loader width=”560″ height=”315″ src=”http://www.youtube.com/embed/c8Tn8n5CIPk?rel=0″ frameborder=”0″ allowfullscreen ]

So, here’s the (growing) list of things putting stockholders and users into a headspin:

  • Pricing changes
  • Losing Starz content
  • Inability to get new content & losing other content
  • Delays on releasing new DVDs & streaming content
  • Lack of clear communication, innovation and strategy
  • Spinning off the DVD service under a new name, CEO and business
  • Two sites to now manage media content, content queue bifurcation
  • Increased competition in the space
  • Adding Video Games as another pay-for service like BluRay

Still, I do like Netflix for what they have done in terms of providing a needed service. I just don’t like what they are doing now. What do you think? Are they moving to continue to be winners in the space? Is spinning off the DVD service just a nail in the coffin of the aging DVD technology and an easier escape route to kill off that service completely? Have they just grown too big to really be innovators anymore or are all of these changes actually part of a solid master plan? Leave your feedback in the comments!

HTD says: My Netflix allegiance is eroding quickly. How about yours?

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  • http://twitter.com/Secgearshop SecurityGearShop.com

    I know many people that have already cancelled their Netflix.  I have.  I have no problem walking down to the redbox and pay a meager fee.  I disagree with you though on HULU Plus.  I had a subscription to it several moths back.  Was not impressed at all wth it.  I think because of who owns HULU it will stick, but wont flourish

  • http://www.hightechdad.com hightechdad

    Well, I think that Hulu has enough relations with networks to make it viable for a takeover by perhaps Microsoft, Apple or even Amazon. And, when you think about it, since Netflix has split, the streaming side might be prime for Amazon to round off it’s streaming service. And now, even since I wrote this article, the Blockbuster/Dish Network service has been released. It’s not a huge competitor to Netflix or Qwikster, but it is keeping all of the services together: streaming, DVD deliver AND gaming. The space is definitely getting interesting.

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