Well, maybe not exactly in so many words. Let me backtrack a little bit.
Earlier this year, Netflix customers were in a rage when they found out Netflix raised their streaming+DVD service fees up by 60%. Many have fled the service altogether. Many commented they were disgusted by the move. In short, everyone was not happy. Most didn’t understand why, neither.
Today, Netflix customers (including myself) have received another news from the CEO saying they’ve screwed up and offered an explain why. While reading, I said to myself, “Oh good, maybe they’ll bring back the free lunch.” Instead, Netflix decided to spin off their DVD subscription business to a new one called Qwikster.
I immediately raised an eyebrow and said, “HUH?!” I’m sure the others did the same. Maybe it was the shock of the name “Qwikster”, or the fact t Netflix hasn’t really fixed anything to make their customers happier.
But then I remembered a few things. I remembered Netflix put their priority on streaming. I remembered the content providers have a new revenue source in the streaming media.1 The future is in streaming: It’s convenient and quick.
So obviously: Netflix is trying to kill off the DVD business!
My thoughts were confirmed from this article on The Atlantic. Mailing DVDs is not a sustainable business model. It’s great for customers, but costly for Netflix. DVD itself is old tech, some of us have already graduated to Blu-ray for HD 1080p content. Mailing out Blu-ray discs will prove to be a more expensive iteration.
In so many words, reading between the lines, I believe Netflix is saying DVD is dead! Time to move on. I just wish Netflix make it a qwik death.
UPDATE: GigaOm offered a good explanation why this split was necessary: reduced subscribers means lower content licensing cost. It makes sense. Unfortunately, people are really leaving both services, which I’m sure not what Netflix intended.
Photo Credit: Kill Taupe
- Additionally, they tried to make everyone pay for playing movies on my iPhone or Tablet. [↩]