Technologizer posts about NetFlix

So When Does Amazon Prime Instant Video Take on Nextflix Directly?

By  |  Posted at 10:58 am on Wednesday, February 8, 2012

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Amazon Letter

Good news for Amazon Prime members: Amazon.com has signed a deal with Viacom that gives its Amazon Prime Instant Video service access to a lot more stuff–from Jersey Shore to Dora the Explorer. It now offers more than 15,000 streaming videos to Prime members at no additional charge.

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Over at Read Write Web, Dan Frommer says that Netflix is OK with Hollywood taking actions that hurt Netflix’s DVD rental business–it wants DVD renting to go away, too:

The future of Netflix is 100% based on its ability to grow into the best streaming video entertainment service. Renting discs is very profitable for Netflix, but it’s the past. That’s why it went as far as to try separating its DVD business last year as “Qwikster,” and that’s why it’s letting studios make DVD rentals less attractive with windows and queue restrictions.

With last year’s Qwikster fiasco, we saw that Netflix is so anxious to exit DVD rentals that it hurts its judgment. It’s never healthy for a company to be in a business it dislikes. I wonder if Netflix has considered just ditching rentals–sooner, not later–rather than hoping that consumers are the ones who do the ditching?

Posted by Harry at 7:48 am

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Netflix: Without Qwikster, No Game Rentals

By  |  Posted at 8:51 am on Thursday, January 26, 2012

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When Netflix backtracked on its plans to spin off DVD rentals into a separate company called Qwikster, the company didn’t say whether it would still add video game rentals to its mail-order service, as announced along with the spin-off.

Now, it’s official: Netflix will not rent video games, or at least it has “no plans” to do so, CEO Reed Hastings said in an earnings call. He did not elaborate.

Netflix had planned to rent video games as an optional upgrade for movie renters. The news excited me because both GameFly and Blockbuster have trouble sending out the newest games in a timely manner. I was hoping that Netflix, with its huge DVD operation, would be able to do a better job with new releases, or at least pressure its competitors to do so.

But without a spin-off, it’s no surprise that Netflix doesn’t want to make the investment. That money is better spent on acquiring more streaming content–the inevitable future of media consumption–instead of trying to rent more discs.



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This Dumb Year: The 52 Lamest Moments in Tech 2011

If you like botched products, corporate mishaps, and just plain weirdness, you had a fabulous 2011.

By  |  Posted at 6:17 am on Friday, December 30, 2011

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Americans, as Winston Churchill famously pointed out, can be counted on to do the right thing–after exhausting all other possibilities. It’s the same deal with tech companies. The wonders they bring us are many, varied, and never-ending, but they’ve always been accompanied by an equally rich assortment of misadventures and wrongheaded ideas. The successes and failures feed off each other, propelling the entire industry forward in herky-jerky, unpredictable fashion.

It may just be me, but I can’t remember many years as peculiar as 2o11 turned out to be for this business. Even demonstrably gifted and sensible people like Netflix’s Reed Hastings seemed to fall victim to a fever that made them do strange, ill-advised things. I hope that 2012 is a tad less weird, but 2011 has been fascinating to cover, and never, ever boring.

In hallowed Technologizer tradition, it’s time to recap the year in dumb. Celebrities, corporate intrigue, sex, violence–they’re all here. Gird yourself, people: Things are about to get really stupid.

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Why Walmart’s Netflix Settlement is Worthless (Twice Over)

By  |  Posted at 8:33 am on Tuesday, November 29, 2011

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If you received an email recently telling you that you would be receiving a Walmart gift card or cash equivalent as part of the corporation’s settlement in a class action lawsuit alleging that Walmart and Netflix illegally worked together to fix DVD rental or purchase prices, then I’m afraid there’s some bad news: It probably won’t amount to enough to rent a DVD (or buy a coffee, for that matter), and there’s no more where it came from.

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Netflix has announced its third-quarter results, and one stat stands out: 800,000 customers left the service its user base shrunk by 800,000 customers overall. Netflix says the defectors were mostly folks disgruntled over its abrupt price hike back in July, not ones rattled by its short-lived plan to split off DVD rentals into a stand-alone service called Qwikster.

At some point, all the unhappy Netflix campers will leave, and I still think that the company is going to a good place with its streaming service. At the moment, though, it needs to repair its reputation. It needs to prove that it cares about its customers and isn’t going to spring any more bizarre surprises on them. It needs to show that it has an adequate degree of self-awareness. It just needs to be normal for a while.

Posted by Harry at 3:54 pm

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Qwikster: Gonester!

By  |  Posted at 9:06 am on Monday, October 10, 2011

1 Comment

I have a confession to make. Ever since Netflix announced its plans to spin off its discs-by-mail business into a self-contained business called Qwikster, I’ve been assuming it would reverse the decision, and have frequently checked Qwikster.com for signs it had done so. I last did it early this morning.

And now it has. In a blog post, Netflix CEO Reed Hastings announced that Netflix will stay, well, Netflix. I never stopped assuming this would be the eventual outcome, especially when the initial announcement was followed by radio silence. There was just too much that was too wrong with the idea–the fact that Netflix was eliminating one of its principal attractions as a service, the fact it did so with a video that almost seemed to brag about it, the name, the fact it didn’t have the Twitter handle. It was all the irrational  result of some sort of bizarre midlife crisis, and the oddest part of all is that the idea got announced before the company came to its senses.

The controversial price hikes, however, remain in place.

Netflix is a fine company with a fine service, and–until recently–the way it’s navigated its transition from a snail-mail powered enterprise to a digital one has been really admirable. With any luck, it’ll get back to business so quickly we’ll forget this brief period of weirdness ever happened.



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The Case for Screwing Up Netflix

By  |  Posted at 8:28 am on Tuesday, September 27, 2011

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Marc Randolph, a former Netflix employee–he was a founder and the first CEO–has chimed in on this whole Qwikster mess. He makes a more compelling, coherent case for divvying up the company’s streaming service and disc-rental business than anything that Netflix/Qwikster has said in its own defense:

So even though I haven’t been at Netflix in a long time, I can easily imagine the growing frustration they must have felt these last few years as they made decisions they knew were suboptimal for the streaming business in order to maintain compatibility with the DVD business.  How to work out pricing that covers multiple use cases.  How to come up with messaging that embraces two different ways to receive movies.  How to manage the significant differences in the content available between the two services.  How to simplify the landing page and sign up flow.

Well no longer.  Not having to worry about compatibility between the services makes it infinitely easier to optimize every decision around the real prize, which is clearly streaming.  Pricing.  Messaging.  Content.  Sign-up-flow.  All better now.

Randolph doesn’t defend Netflix’s communications about the price hike, name change, and related matters: He calls them “ham-handed” and “tone-deaf.” But I wonder how well Netflix customers would be taking the news if the company’s communications had been flawless, and if it had come up with a way better name than “Qwikster.”

I don’t come away from Randolph’s piece entirely convinced of the righteousness–ham-handed, tone-deaf messaging aside–of what Netflix is doing. Or maybe I’m so convinced that I don’ think the company’s going far enough. I mean, if renting DVDs by mail is so unpleasant a business to be in, shouldn’t Netflix just sell, spin off, or shutter Qwikster? Sooner or later, it’s going to take one of those actions. Why not do it today, rather than complain about all the downsides of disc rentals and how they’re standing in the way of the streaming business?



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Sell Netflix to Amazon? That Might Be Crazy Enough to Work

By  |  Posted at 5:46 pm on Saturday, September 24, 2011

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This whole Netflix-Qwikster split had a fair number of people wondering if Reed Hastings had lost his mind. Hastings is no dummy, though, so there’s got to be some sort of method to the perceived madness.

Industry analyst Michael Pachter wrote in a note to clients the very same thing; that there’s “a method to their madness,” reports MarketWatch.

Pachter’s theory? Netflix could sell its streaming business to Amazon, a company with deep pockets that’s been aggressively trying to make inroads with its digital content offerings. It’s done well with digital books, it’s still trying to get its footing with digital music, and perhaps now we get to see how big it can go with movies and TV. And what better way to go big with streaming movies and TV than to buy the company best known for streaming?

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Blockbuster’s New Service Isn’t a Qwikster Killer. At Least Not Yet.

By  |  Posted at 11:04 am on Friday, September 23, 2011

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I just attended a press conference hosted by Dish Network and its Blockbuster division, where they announced Blockbuster Movie Pass, a service with discs-by-mail (including Blu-Ray and games at no extra charge), unlimited on-demand streaming to TVs and PCs, and more–for $10 a month. Sounds like a formidable competitor to the service formerly known as Netflix, which is about to be divvied into Netflix and Qwikster. Except it turns out that Dish isn’t announcing anything aimed at consumers who have cable or who want to cut the cord–Movie Pass is for Dish subscribers (and includes twenty channels of live movie programming via satellite as well as its other stuff).

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Qwikster: The People Speak! (Unfavorably!)

By  |  Posted at 12:35 pm on Tuesday, September 20, 2011

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Someday, the name “Qwikster” may be famous, even beloved–or at least tolerated. For now, even pundits who think that Netflix is doing the right thing by splitting its Internet streaming and disc-by-mail services in two seem to be pretty much unanimous in regarding the name the company is giving the disc half of its business as dippy. But what do real people think?

Branding company Strategic Name Development–the outfit that named Wendy’s Baconator, among other products and companies–has already conducted a survey of five hundred consumers, and…they don’t like “Qwikster” either! Or at least they find it confusing. (Only 19 percent say it’s a good name for a service that does its business by mail.)

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The Upside of Qwikster: Video Games

By  |  Posted at 2:18 pm on Monday, September 19, 2011

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Harry’s already written a bunch about Qwikster,  Netflix’s newly-named business for mail-order DVD rentals. And while I agree that it’s a silly name, and that the announcement was pretty sloppy, I’m still excited about the news simply because Qwikster will rent video games as well as movies.

Netflix–er, Qwikster–hasn’t described its game rental service in detail, but did say that it’ll be an optional upgrade to movie rentals. As someone who subscribes to both Netflix DVDs and to GameFly, that’s an appealing alternative.

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Why did Netflix raise (most of) its prices in July? Weirdly, given all the consternation and CEO Reed Hastings’ mea culpa/rebranding announcement this week, it’s never explained its decision in anything like a direct manner. But venture capitalist Bill Gurley has a logical theory: Hollywood is treating Netflix like a cable company:

So here is what I think happened with Netflix’s recent price change (for the record, I have no inside data here, this is just an educated guess). Netflix has for the past several years been negotiating with Hollywood for the digital rights to stream movies and TV series as a single price subscription to users. Their first few deals were simply $X million dollars for one year of rights to stream this particular library of films. As the years passed, the deals became more elaborate, and the studios began to ask for a % of the revenues. This likely started with a “percentage-rake” type discussion, but then evolved into a simple $/user discussion (just like the cable business). Hollywood wanted a price/month/user.

This is the point where Netflix tried to argue that you should only count users that actually connect digitally and actually watch a film. While they originally offered digital streaming bundled with DVD rental, many of the rural customers likely never actually “connect” to the digital product. This argument may have worked for a while, but eventually Hollywood said, “No way. Here is how it is going to work. You will pay us a $/user/month for anyone that has the ‘right’ to connect to our content – regardless of whether they view it or not.” This was the term that changed Netflix pricing.

Posted by Harry at 10:08 am

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Qwikster: Not to be Confused With Quixtar, QuickStar, Kwikster, Quickster, Kwik Star, Quik-Star, or Kickstar

By  |  Posted at 3:21 am on Monday, September 19, 2011

67 Comments

The best-known name in the business of renting DVDs by mail is, of course, Netflix–a brand that’s been with us since 1998, and which is as synonymous with its category as any American company ever has been. But now it’s reserving the name “Netflix” for its streaming business and redubbing the snail-mail portion as “Qwikster.” By doing so, it’s dumping a great brand and beginning all over again with one that starts with absolutely no value whatsoever.

Already, people are amused by the fact that there’s a @qwikster account on Twitter that has nothing to do with Qwikster. But that could be just the start of the confusion. You see, it’s not instantly obvious how to spell “Qwikster”–I’ve forgotten repeatedly already–and there’s a fascinating roster of existing products and services that have similar names.

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Want to See Starz on Netflix? You’ve Got Until February

By  |  Posted at 7:38 pm on Thursday, September 1, 2011

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So much for Starz movies on Netflix. Negotiations between the two companies have fallen through, and Starz has announced that it’ll stop providing movies for Netflix’s streaming catalog on February 28, 2012.

Netflix had paid an estimated $30 million for Starz content in 2008, which in hindsight was a steal. Three years ago, Netflix had just started appearing on set-top boxes like the Xbox 360, and Hulu was still getting off the ground. To renew the deal with Starz, Netflix had earmarked $250 million, according to the AP.

UPDATE: Here’s a story by the L.A. Times’ Ben Fritz that says Netflix offered $300 million, but Starz wanted tiered pricing, which would charge subscribers a premium to view its content. Interesting, but not surprising, that Netflix didn’t want to go that route.

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Sorry, Blockbuster, It Doesn’t Sound Like You’re Rescuing Netflix Customers to Me

By  |  Posted at 2:37 am on Friday, July 15, 2011

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It isn’t easy being Blockbuster. When the company’s in the news, the news is usually lousy–like in September of last year, when the once-mighty video rental chain went bankrupt.

This, however, has been a good week for Blockbuster. Sort of. At least if you assume that a bad week for Netflix is automatically a good one for Blockbuster.

Blockbuster seems to think so. After Netflix ticked off customers by raising the cost of subscribing to plans that include both streaming and DVDs-by-mail, Blockbuster issued a press release which it titled “Blockbuster Rescues Furious Netflix Customers.” Oozing schadenfreude, it quoted Blockbuster’s president saying that Netflix’s price hikes were “shocking” and pointed out some advantages of Blockbuster over Netflix, including Blu-Ray rentals at no extra cost, the availability of game rentals, the ability to return discs to a brick-and-mortar Blockbuster location, and no 28-day delay before new titles arrive.

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