The real question to ask is: Is this good for customers?
It doesn't matter if the goals of the two businesses are different. What matters is how it affects customers. Do customers consider the services as separate entities or as two parts of the same whole?
I think they'll lose a few customers who like both services, but feel awkward about dealing with two companies now instead of one (like me).
Netflix Splits DVD And Streaming Businesses
51–60 of 206 posts
Re: Netflix Splits DVD And Streaming Businesses
#52[deleted]
Re: Netflix Splits DVD And Streaming Businesses
#53I'll throw it out as a side note, because in all the discussions I've read on Netflix of late no one seems to mention it: Netflix has FANTASTIC kids content available for streaming. My kids would revolt if we cancelled our service. That alone guarantees my business until there is a truly compelling replacement. I cannot believe we're the only family like this. And while this is probably not a large enough market to s…
Yup. My kid is only two, but even I have noticed that Netflix has 6 full seasons of Spongebob and nearly 100 full episodes of Seasame Street. It's pretty important to me that my child not be bombarded by advertisements before he gains any critical thinking skills, so I'll be a Netflix customer for a long time yet, I'm sure. I'm just hoping they use this extra cash to get some better content (or create it themselves) for me.
Re: Netflix Splits DVD And Streaming Businesses
#54Netflix steaming is the new Blockbuster. I disliked Blockbuster because their stores had many copies of currently popular movies and not much else. I liked Netflix because it had an enormous catalog that let me work on seeing all of the great films that had been made in the last 100 years that I'd missed. Netflix streaming is like Blockbuster. At any given time it lets me access only a fraction of its catalog and that fraction is biased toward what is popular. Netflix steaming is the new Blockbuster. :-(
Re: Netflix Splits DVD And Streaming Businesses
#55Netflix steaming is the new Blockbuster. I disliked Blockbuster because their stores had many copies of currently popular movies and not much else. I liked Netflix because it had an enormous catalog that let me work on seeing all of the great films that had been made in the last 100 years that I'd missed. Netflix streaming is like Blockbuster. At any given time it lets me access only a fraction of its catalog and tha…
I'd love it if Netflix streamed popular movies.
Re: Netflix Splits DVD And Streaming Businesses
#56A poorly thought out point: a defensive move against the whole company folding due to some reason?
Re: Netflix Splits DVD And Streaming Businesses
#57That Netflix needs to keep making these changes is simply a symptom of a brutal endemic problem:
In general, subscription business suck.
For example, a typical gross CAC for a business like netflix is $200. At $10/mo the subscriber has to stay a sub for almost 2 years before any profit is made. Meanwhile the company had to spend the $200 up front, burning through capital. Also, meanwhile, 15-20% of the customers leave every month. Those customers will never pay off the costs the company spent to aquire them. It's an never-ending spiral of death. As seen by Vonage, Netflix, etc...
But Netflix has another endemic problem: They are the bitch of the content providers. Netflix owns NOTHING (especially in their streaming only biz). All it takes is one content provider to balk (Starz) and the only way they'll get new subs is to spend more on marketing which raises CAC. Which accelerates death.
Name a few successful subscription businesses. Successful (in my mind) means PROFITABLE. Revenue does not mean sh. Come-on, name 'em. (Those that you do name will have some sort of monopoly or exclusive right to a physical asset).
This is why, as an investor, I will never invest in companies that think they can be successful with a subscription business model.
This is also why Apple is kicking ass. Apple gets paid up front. The only way to go.
Re: Netflix Splits DVD And Streaming Businesses
#58The elephant in the streaming office is the lack of blockbuster titles, many of which are only available through their DVD by mail business. If they're betting everything on streaming i'm guessing (hoping) that they've also figured out a solution to this problem. Otherwise, they've lost the big benefit of credibility that DVD by mail brought to their service.
Eh. I'll just use Redbox for that. Faster anyway.
Re: Netflix Splits DVD And Streaming Businesses
#59It seems I'm in the minority who thinks this is an over the top reaction to Wall Street pressure. It was clear for a number of years now that Netflix saw streaming as the future. But cutting off the DVD business like that... it's extreme. A lot of the movies are not available for streaming. Yes, their streaming portfolio is probably still the best (and has excellent children's content, my son watches it every night) but why force your users to decide?
The problems, as I see them:
1. The two parts (DVD & streaming) had different characteristics (bigger collection vs. instant gratification) that balanced each other. This synergy is now gone.
2. The attack surface for other companies has just doubled. Netflix's DVD handling is super streamlined (they have special sorters in postal centers) but there are other strong players like Redbox here. The streaming biz is nothing unique, Amazon can easily get to that level of collection in a short time. Divide and conquer? They just did it to themselves!
3. As others have pointed out, the reviews, and user histories will be split. From a subscriber perspective this is most undesirable, now I have to deal with two sites.
4. The quality of recommendations will suffer with less data (they weren't great to start with) after the split.
5. How will this affect developers using the Netflix API?
6. What will happen to Netflix's original content creation efforts, this will be a huge distraction to those. And they are vital.
Overall, this has a heavy handedness to it that makes you wish for the comfort of the likes of Amazon.
EDIT: This also makes my suspicions that Amazon is gearing up to a massive upgrade of their offering soon. Netflix probably tried to focus on streaming and stay ahead in the game. How? I don't know.
Re: Netflix Splits DVD And Streaming Businesses
#60I read this and my brain immediately thought it had to be an April Fools joke. It took a second or two to remember it is September. Regardless, my hat is off to them for betting the company's name on their streaming business. I know that's the only part of their service I use anymore -- I've had the same DVD checked out for over a year because I couldn't be bothered to deal with the perceived hassle of managing my qu…
Same here - I actually caught myself looking up at the date on the taskbar before realizing the same thing. I think the ridiculousness of the 'Qwikster' brand name was what made me doubt it at first.