Netflix changes again! Anyone get this email?

[The Mystery Machine]

[FONT=Arial, Helvetica, sans-serif]Dear "Mystery Machine",

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.

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[Sparx]

My current streaming account is suspended until further notice.

I wish instead of talking about how super dooper awesome netflix dvds are he would have talked about the price gouging for a lacking streaming service and how they plan to fix that.

 

[java]

I got it and now I am really ready to bail. What is wrong with them? Why are they calling it 2 different things? It really has to be some legal thing- with licensing? I can't think of any other reason.

We tried to find a streaming movie this weekend and spent an hour trying to find one. Most seemed like soft porn! We ended up watching Towering Inferno. Which I probably could have caught for free on TNT.

 

[LuvsDragonflies]

So what now? I keep my old service that they had me change a week ago? WTH???

 

[The Mystery Machine]

I am not sure what I am going to do at this point. Now off to read "Hacking Netflix".

 

[zoemurr]

So now if I'm looking to see if a movie streams and it doesn't I have to go to another site and search for it again to put it in my DVD queue?

Hello?? I also love that if it is in my DVD queue and then is able to stream at some point the service will tell me.

Yikes!

 

[The Mystery Machine]

So now if I'm looking to see if a movie streams and it doesn't I have to go to another site and search for it again to put it in my DVD queue?

Hello?? I also love that if it is in my DVD queue and then is able to stream at some point the service will tell me.

Yikes!

Well, I guess so, huh?

I am not one to get easily irritated but this seems to be sticking in my craw.

I am really going to have to see how things go and then I might just bail on the whole thing.

 

[bdoyledimou]

I got it and now I am really ready to bail. What is wrong with them? Why are they calling it 2 different things? It really has to be some legal thing- with licensing? I can't think of any other reason.

We tried to find a streaming movie this weekend and spent an hour trying to find one. Most seemed like soft porn! We ended up watching Towering Inferno. Which I probably could have caught for free on TNT.

I watched Iron Man 2 and Tangled last night... we must be looking at different Netflixes.

 

[java]

I watched Iron Man 2 and Tangled last night... we must be looking at different Netflixes.

We saw those over a month ago on streaming

 

[RayaniFoxmur]

There's some interesting comments from Reed on the blog... apparently separating the sites will allow them to get more licensing for streaming content? Not sure why that makes a difference but whatever. We only use streaming here so it doesn't effect us terribly, though I do wonder how the separating sites will effect the new streaming rules dealing with streaming more than 1 thing at a time.

 

[MIGrandma]

Yup, the same e-mail was in my in-box this morning. I honestly don't mind the splitting of streaming and DVD's and charging different prices for each one, but re-naming the DVD portion to Quikster? To me that is just stupid, and it's going to be kind of cumbersome and awkward to have to go to two different web sites. Why the split in the name and why two different sites? I don't like that part.

 

[The Mystery Machine]

There's some interesting comments from Reed on the blog... apparently separating the sites will allow them to get more licensing for streaming content? Not sure why that makes a difference but whatever. We only use streaming here so it doesn't effect us terribly, though I do wonder how the separating sites will effect the new streaming rules dealing with streaming more than 1 thing at a time.

Ah....interesting comment. I wonder....

My guess is that they are going to make it "unlimited streaming" and then raise the price eventually.

I know the email says "we are done with price increases"....which I cry, BALONEY.

 

[Acklander]

This is getting way too complicated. So now I won't be able to tell if something on my DVD list has become available on the streaming list, without a lot of cross checking.

 

[java]

Ah....interesting comment. I wonder....

My guess is that they are going to make it "unlimited streaming" and then raise the price eventually.

I know the email says "we are done with price increases"....which I cry, BALONEY.

I'm saving the email! With them losing the deal with Starz Play I know they are going to have to do something to beef up their streaming availability. I think they are making it easier to drop one of the services. I kept mine as was- just because. But now it will be easier to just drop dvd, if they beef up streaming.

 

[PeterPan09]

Ah....interesting comment. I wonder....

My guess is that they are going to make it "unlimited streaming" and then raise the price eventually.

I know the email says "we are done with price increases"....which I cry, BALONEY.

That was my feeling too. I did keep the streaming, mostly because of the classic TV catalog. However, my finger is on the cancel button because I've really lost trust in Netflix as a company. If I don't see some improvements in the streaming catalog, I'm history.

The only reason I can think of for splitting the entities is for some kind of contract/accounting issue.

 

[The Mystery Machine]

That was my feeling too. I did keep the streaming, mostly because of the classic TV catalog. However, my finger is on the cancel button because I've really lost trust in Netflix as a company. If I don't see some improvements in the streaming catalog, I'm history.

The only reason I can think of for splitting the entities is for some kind of contract/accounting issue.

After this stunt, I have finally lost trust. They kept this under wraps and hit us in the face with it.

 

[Family Fun Mom]

If Nextflix DVD service has always gone so well why didn't they keep the name Netflix for the already established, successful service and change the streaming name, since it is the newer, struggling one?

None of it makes a lick of sense and it is getting too complicated. I already dropped the DVD portion when the prices were raised. I think I may drop them completely and give Blockbuster a try.

 

[cornflake]

I'd guess they split so that they can control or reclassify the stock price fall and so they can eventually sell off the DVD side.

However, given Starz' stand, I don't know how streaming catalogues will improve. If Starz can see the need to take the stand they did, so will everyone else.

 

[The Mystery Machine]

I'd guess they split so that they can control or reclassify the stock price fall and so they can eventually sell off the DVD side.

However, given Starz' stand, I don't know how streaming catalogues will improve. If Starz can see the need to take the stand they did, so will everyone else.

Good point.

I see this as the beginning of the end of Netflix I guess.

 

[Feckless]

I watched Iron Man 2 and Tangled last night... we must be looking at different Netflixes.

You are - the Canadian version is only streaming, and relatively new. I like it alot, but I can totally understand if it was all kinds of awesome with DVD and streaming like it was in the States and now they are trying to just push the suckish Canadian version on Americans by separating the two services.