Netflix to Quikster

I'm not one of the people whining so much about the new fees at Netflix. If I don't feel I'm getting my money's worth, I'll just cancel. So far, I don't feel like I'm being ripped off, but I haven't really looked at it closely.

However, I just got this e-mail. So how does splitting the business and changing the name address the criticisms?

Dear Eric,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

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 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, 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 Qwikster.com and Netflix.com 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 Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.

Originally posted by Kunsoo
I'm not one of the people whining so much about the new fees at Netflix. If I don't feel I'm getting my money's worth, I'll just cancel. So far, I don't feel like I'm being ripped off, but I haven't really looked at it closely.

However, I just got this e-mail. So how does splitting the business and changing the name address the criticisms?

Dear Er ...[text shortened]... xplanation along with a video posted on our blog, where you can also post comments.

Originally posted by PsychoPawn
I got the email myself.

I think it's one of the dumbest decisions unless they are for some reason planning on selling off the DVD rental business.

One of the benefits of having both the streaming and the DVD rental service was that you could put a DVD in your dvd queue and if it was available via instant then it would also show up in your instant ...[text shortened]... mers by separating the bills and separating the sites.

Also, the name quickster is idiotic.

I just got the e-mail myself...I have never tried streaming, I just like getting a dvd..old fashioned I guess.

Originally posted by techsouth
Quickster sounds too close to the name QuickStar, which is a spin off of Amway.

That distasteful similarity alone may be enough to make me cancel my membership.

I think the stock market's reaction pretty much sums it up (the company has lost half its value).

Their problem was they didn't have the revenue stream for instant viewing to support improving their content quality.

Their instant viewing content sucked before, and it's been getting better, but they aren't making that improvement very visible. If they'd simply offered a for-pay upgrade to their streaming that provided better movie selection, they could have accomplished the same goal and had the benefit of making people see what they're getting.

Their biggest problem is that people just saw themselves paying more without seeing any improvement, and that's bad news. They're just repeating that same problem by changing their name, but people will see no improvement and no change in service.

It's really time for Reed Hastings to be fired. He's got a tough challenge, but I think anyone can tell him he's going about it the wrong way.

Originally posted by Kunsoo
I'm not one of the people whining so much about the new fees at Netflix. If I don't feel I'm getting my money's worth, I'll just cancel. So far, I don't feel like I'm being ripped off, but I haven't really looked at it closely.

However, I just got this e-mail. So how does splitting the business and changing the name address the criticisms?

Dear Er ...[text shortened]... xplanation along with a video posted on our blog, where you can also post comments.

Originally posted by normbenign
Blockbuster is on lifesupport, Netflix in its mailing of DVDs will be in bigtime trouble with the post office closed on Saturdays. The only outfit in the movie rental business that seems to be prospering is Family Video.

Originally posted by Kunsoo
If the post office closes on Saturdays, they won't be the only business in trouble. That will be a disaster.

Originally posted by normbenign
The USPS will be closing Saturdays, and probably about a quarter of PO will close.

While I think the brand change is a dumb move, I love Netflix. $20 a month for unlimited streaming and 2 DVDs at a time with 2 day turnarounds and top level customer service (plus they don't bother you if you lose or damage a DVD) is a bargain.

Netflix is a true capitalism success story, alongside Amazon and Google and all the rest.

There's a reason that your passport takes 6 weeks to process and costs over $100.

If Netflix would be in charge of generating passports, you'd take a picture of yourself, upload it and get your passport tomorrow and it would cost $10.

Put Reed Hastings, Jeff Bezos and Steve Jobs in charge of the federal government and lock out all the lobbyists and special interest groups and we'd be running a budget surplus and growing GDP 5% a year with 5% unemployment, although perhaps the American flag would have to be changed 2 or 3 times a decade.

Originally posted by sh76
While I think the brand change is a dumb move, I love Netflix. $20 a month for unlimited streaming and 2 DVDs at a time with 2 day turnarounds and top level customer service (plus they don't bother you if you lose or damage a DVD) is a bargain.

Netflix is a true capitalism success story, alongside Amazon and Google and all the rest.

There's a reason that ...[text shortened]... ployment, although perhaps the American flag would have to be changed 2 or 3 times a decade.

Originally posted by Kunsoo
Is there a reason my private insurance company takes four months to process a referral from my GP to a specialist? It doesn't take that long for my clients on MediCal.

Originally posted by sh76
While I think the brand change is a dumb move, I love Netflix. $20 a month for unlimited streaming and 2 DVDs at a time with 2 day turnarounds and top level customer service (plus they don't bother you if you lose or damage a DVD) is a bargain.

Netflix is a true capitalism success story, alongside Amazon and Google and all the rest.

There's a reason that ...[text shortened]... ployment, although perhaps the American flag would have to be changed 2 or 3 times a decade.

Originally posted by Kunsoo
Is there a reason my private insurance company takes four months to process a referral from my GP to a specialist? It doesn't take that long for my clients on MediCal.