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Thoughts on Netflix and Qwikster

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Earlier this week, Netflix announced that it was going to split Netflix's businesses into two - a business that ships DVDs and a business that streams media over the Internet. This follows on the Netflix's controversial pricing change where they raised rates for many consumers by 60% by splitting the $10 business and making it two $8 businesses.

On Sunday, Netflix CEO Reed Hastings made things even worse with this announcement on the Netflix blog. He said that Netflix will spin off the DVD business into a business called Qwikster and Netflix would remain the streaming video business.

Here are a few of thoughts I had while reading the blog post:

  • Qwikster, really? (Part 1) - I get the name Netflix, it makes sense for an Internet streaming movie service. However, when splitting apart two companies and one is known is for "Instant delivery", it is curious to call the much slower option a name that implies it is quicker. This is like McDonalds trying to make itself into a healthy food chain and spinning off Double Quarter Pounders into a company called ThinBurger.
  • Qwikster, really? (Part 2) - Again, Neflix is aptly named. Qwikster doesn't imply it has anything to do with movies or entertainment. Qwikster sounds like a name best used to describe Speedy Gonzales as in, "Senor Gonzales es un Qwikster." (Excuse my Spanish, it's a first for me on the blog and I'm at least ten years rusty.) I need to update my McDonalds analogy above to ThinHat to make it a completely irrelevant to name to the business model.
  • Qwikster, really? (Part 3) - Qwikster reminds me of Napster. You might remember it as the peer-to-peer music service that was shut down due to the illegal trading of music. The Napster brand is still alive as a Best Buy company that few people use. Really, Mr. Hastings? You could choose from any number of names to launch this new brand and this is what you go with?
  • Separate Websites - I realize that this is necessary when you splitting businesses. However, many people like to do all their shopping from one place. It's probably one of the biggest reasons for the success of places like Target and WalMart. Comcast is in my face every ten minutes telling me that I can get my cable, Internet, and phone service on one bill from one provider. Mint has financial management so much simpler buy combining data from many sources and putting it in one place. When I want to watch a movie, I want to go to one place. I don't want to look at NetFlix, find that it isn't the extremely limited streaming service and then have to go order it from Qwikflix.
  • Separate Movie Rating Services - One of this is two different rating services. The blog post said, "... if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa." If I'm looking for a movie review, I don't care if the person watched it on Qwikster, Netflix, or at ThinHat with my burger (come on, it's catchy, right?). More importantly, what about the sharing of movies with friends. If my friend is a Netflix customer, they should still be able to refer movies to me as a Qwikster customer. Perhaps the other way around isn't true due to the limited nature of the streaming catalog.

I could go on with a few more points, but I don't need to beleaguer the point. (CNET has a bunch of articles if you are interested.) It seems like Netflix is clearly passing the torch from the service I use, DVD by mail, to Internet streaming. I think it will be many years before they are able to license the breadth of content and deliver it as 1080P HDTV quality. If they are able to pull that off, I imagine it will be quite expensive as a monthly service - possibly more than a hundred dollars a month.

Bottom line, if the company doesn't see a future for the DVD service I use, perhaps I should take their cue and cancel, right?

Posted on September 21, 2011.

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11 Responses to “Thoughts on Netflix and Qwikster”

  1. I’m pretty sure they got the idea for the name from Friendster, not Napster.

    I agree that it’s an awful name. MailFlix would be an obvious alternative to NetFlix, but some people might be confused and think this was MaleFlix, an offshoot of Playgirl.

    It would be ironic if the spun-off company gets into a price war with the Netflix company and drives prices below $5 for each service (i.e. combined cost of less than the previous $10).

    It would be cool if all sites that sell movies would utilize a common framework for reviews, so that you could see everyone’s reviews, regardless of what site you were one. Maybe even place the reviews of your own users higher than the others.

  2. I agree with Kosmo — The name Quikster reminds me of Friendster, and it sort of gives me the impression that Netflix execs are behind the curve on hot technology.

    Anytime a “revolutionary” new idea is rolled out, its common for everyone to criticize it — and years later, when it works, people start recognizing it as a valid/good idea. But I make that as a general statement, not as a specific defense of Quikster. My jury’s still out on that one.

    Will I use it? Yes, but only because Netflix has an awful instant-streaming selection. Most of what I want to watch is only available by snail mail.

    Why don’t I just change companies? Because everytime I think of a movie I want to watch, I add it to my Netflix queue — it’s become my “bucket list” of movies. Changing to another service would mean that I’d have to transcribe that list. That would take at least an hour. That’s enough of a barrier to keep me a customer for life.

  3. Kidding aside, Quickster actually makes me think of Kwik Star, a local convenience store chain. Wondering if their sales are going up (or maybe down) as people subconciously link them to Quickster.

  4. Norman says:

    I understand Netflix’s desire to separate the two services, but I think they may have put the cart before the horse. I decided to keep the streaming service and I dropped the DVDs by mail, but now I’m having second thoughts since the streaming selection is so poor. They should have waited to do this AFTER they had the streaming service on par with the DVD service.

  5. AK says:

    Quickster reminds me of Quixtar – an Amway brand MLM scheme. I’m surprised you of all people didn’t think of this! :)

    • Lazy Man says:

      I forgot about it because I still call Amway by its name, Amway. It’s kind of like calling MLM by the name Direct Selling. I don’t buy the “change your name and start on a new reputation” game.

  6. Cole says:

    This all seems like bad timing. I think the separation of services should have come with the name change so that their costumers wouldn’t be bombarded with too much change. I for one have stayed with Blockbuster not only because of their ability to always provide me with games and movies, but because they’ve taken a whole new approach to business now that DISH Network has acquired them. As an employee of DISH I know that new subscribers who are looking for a dependable one-stop provider are being offered 3 month’s free of Blockbuster (http://bit.ly/l2OWJ8). I’m sure many of these customers soon to be lost by Netflix will take to offers like this.

  7. I thought it was pretty weird too! When they changed their prices, I cancelled the DVD service and went with just the streaming option. I’m sure this is going to frustrate even more users. They should’ve communicated a little better with the customers before making all these abrupt changes.

  8. […] Thoughts on Netflix and Qwikster  […]

  9. Mike Moyer says:

    Next stop… advertisements in the live streams, similar to Hulu.

  10. […] Death of Quikster – I think I'm happy that I didn't get too attached to Qwikster. Netflix seems to have wisely changed their mind on that […]

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