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Netflix Splits DVD And Streaming Businesses

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Re: Netflix Splits DVD And Streaming Businesses

#141

Post by JeffDClark »

foobarbazoo wrote: post #93
JeffDClark wrote: post #35

Earlier quoted context omitted.

Totally agree. It was a no brainer to cancel the DVD side of our subscription, but the streaming, no way.

Amazon Prime streaming is more than enough for children, and most families already have it. And the kids don't care at all who they get the shows from. I expect Amazon to continue to aggressively compete in this area, not to mention Apple and someday, Google. Netflix is giving away their core advantage -- a huge content library and DVD/Blu-ray backup for anything not-yet streamed. No one else has that. Now they're ju…

But Amazon Prime streaming is not (yet?) available on the AppleTV that the kids use. Sure I keep meaning to jailbreak the darn thing but I never quite find the time to do so.

Netflix has huge penetration into hardware that Amazon does not have and to me that is a huge leg up for them. Also I can not believe that Netflix does not have an ace up their sleeve, i.e., a serious infusion of streaming content. However, I would be in awe if they did not have that ace up their sleeve and are instead trying to push the content providers into the present so that we can get on with the future.

Re: Netflix Splits DVD And Streaming Businesses

#143

Post by fluidcruft »

MatthewPhillips wrote: post #106
arithmetic wrote: post #87

Earlier quoted context omitted.

If you had to pick between DVD and streaming service, and make one of them phenomenally better than what it is now, which one would you pick? DVD, because everyone knows and loves it? Or streaming, because it's growing rapidly? You get to pick one. With the split, Netflix gets to focus entirely on streaming - make it better for the customer. Which means, more (and better) content, faster and better streaming service,…

You can do exactly that without rebranding the product. They're called divisions. Give each one a CEO, but to the customer they should all be Netflix.

But divisions can't go bankrupt and die as easily. Qwickster or whatever it is has a death sentence. It's value wull be polished just enough to sell it off to suckers. And when it dies Netflix will just shrug.

Re: Netflix Splits DVD And Streaming Businesses

#144

Post by bostonpete »

jonknee wrote: post #118
arithmetic wrote: post #87

Earlier quoted context omitted.

If you had to pick between DVD and streaming service, and make one of them phenomenally better than what it is now, which one would you pick? DVD, because everyone knows and loves it? Or streaming, because it's growing rapidly? You get to pick one. With the split, Netflix gets to focus entirely on streaming - make it better for the customer. Which means, more (and better) content, faster and better streaming service,…

How does splitting them up make them each phenomenally better? Why should the customer care about Netflix's internal organization? Make the same changes, just keep the top level name and details like accounts/recommendations. If I buy a Macbook Pro it's from Apple and if I rent a movie from the iTunes store it's from Apple... They are completely different business units internally, but to the customer it's the same c…

One theory, discussed by Bill Gurley in the post below, is that it'll put them in a better negotiating position with the studios, who were trying to get a percentage of Netflix revenues (not just the streaming revenue)...

http://abovethecrowd.com/2011/09/18/understanding-why-netfli...

Re: Netflix Splits DVD And Streaming Businesses

#145

Post by lliles »

Question for anybody more familiar with the content licensing business:

How does Netflix becoming stream-only affect their negotiating position with the content license holders?

One comment points out that both Netflix and content holders can't lean on the DVD mailing business to supplement licensing costs. Is it really the case that content providers could hold Netflix to higher licensing costs or more catalog restrictions if they (both sides) know Netflix has the DVD mailing business to supplement the streaming business?

I wonder if there are other reasons behind this split more directly tied to licensing. Would content providers be more willing to open up their content catalogs with a stream-only business?

Re: Netflix Splits DVD And Streaming Businesses

#146

Post by Aron »

TomOfTTB wrote: post #13

I think this is a good move simply because the two divisions have contradictory goals at this point. For example, the Qwikster division should be looking at finding ways to deliver DVDs quicker (Kiosks for example). But that's not something that would ever occur to Netflix because they're focused on streaming as the future. Which is where the contradiction comes in. It is hard to run a business unit when the goal of…

In terms of stock timing, I have a hard time believing that this kind of move was completely held secret. This takes a lot of prep work, and whispering has to go on, and rumors spread fast to connected people who can profit. I suspect the excessive reaction last week to the news of that week may have actually been boosted by inside knowledge about this move today.

So if any of that's true, you can't exactly assume that last week's stock move would have been the same in an alternate world where they weren't going to announce this today. At any rate, appearances generally give way to fact eventually.

Re: Netflix Splits DVD And Streaming Businesses

#147

Post by bbarthel »

encoderer wrote: post #136
bradleyland wrote: post #132

Earlier quoted context omitted.

That air gap is being created by Netflix. Why would they separate the sites and businesses so distinctly if their intention weren't to create an air gap?

Because they have fundamentally different cost structures, and each will benefit from a dedicated CEO who is accountable for results and responsible for strategy? You really think that the respective sites will have no integration? Not a single-sign-on user account? Not an "Available on Netflix" link? Why? It makes business sense for both units and it doesn't impede any of the objectives of the spinoff.

It is not indicated via techcrunch, but in the original announcement it was explicitly stated there will be no integration and separate accounts:

"A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated."

http://blog.netflix.com/2011/09/explanation-and-some-reflect...

Re: Netflix Splits DVD And Streaming Businesses

#148

Post by waterlesscloud »

arithmetic wrote: post #82
omarchowdhury wrote: post #61

Earlier quoted context omitted.

Another thing. Not all users have a device connected to their TV that works with Netflix (like an Xbox). Nor do those same people want to watch a movie or a TV show on their computer. Those people request DVDs. I don't see the issue with keeping everything under one brand. Netflix became popular because of their DVD-in-the-mail service. It's a shame to spin that off into a sub-par seeming brand. Just keep it all unde…

Disclaimer: Netflix employee here The main reason for the split is the realization that streaming service and DVD service are two completely different businesses that need to grow in completely different ways. For example, in case of streaming service, we've just expanded to Latin America and the Caribbean (to 43 new countries). In case of the DVD service, we're adding a new video games catalog. DVD service is still…

Not one of my friends has had a positive reaction to this. Not one. A large percentage of them are expressing very negative reactions.

Anecdotal, but I suspect this will be the least popular move the company ever makes.

Re: Netflix Splits DVD And Streaming Businesses

#149

Post by xinsight »

nihilocrat wrote: post #130

For the record, since Netflix Canada launched sometime last year, it has been a streaming-only service. We have a kind of sucky selection that is getting better as time passes, but I can understand why they went streaming-only. From this perspective, it's pretty odd seeing people disapproving of the choice or showing attachment to the DVD service.

Totally agree. There is so much to hate about the DVD watching experience - the menus, unskippable ads/trailers, poor image quality, getting stuck on a scratch - I can't wait for them to disappear.

But, i'm guessing the DVD fans are actually arguing for the larger catalog, not for plastic discs.

Re: Netflix Splits DVD And Streaming Businesses

#150

Post by [deleted] »

cookiecaper wrote: post #123
perucoder wrote: post #117

Earlier quoted context omitted.

What's to stop you from switching to Amazon? Have you tried watching a movie on Amazon? Way less usable and its hard to find movies sometimes. Netflix has a way better interface and what I find myself doing is checking on Netflix first, and then only if they don't have it, do I go to Amazon.

I've watched things on Amazon Instant in the past and didn't find it any less usable. In fact, I actually find Amazon more usable since it works on my operating system. It's kind of a moot point to say "Well, Amazon has a crappier interface, so Netflix is safe", since Amazon can always update its interface to something more friendly. The important point is that Netflix has given up one of the major incentives to use…

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