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Netflix splits business in two, DVD-by-mail renamed Qwikster

By Jos · 9 replies
Sep 19, 2011
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  1. Netflix is moving to formally separate its DVD-by-mail rental service from its video streaming business, as announced back in July. The former will now be called Qwikster and should be…

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  2. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 3,151   +1,411

    Based on the news article linked on google's news page to CNN Mondy http://money.cnn.com/2011/09/19/technology/netflix_cash/

    I?m going to guess the separation was done in order to insulate Quikster from netflix?s impending doom. It appears that google, apple, Microsoft may try to get in the content streaming business and can afford to buy far more content than puny ?lil Netflix. Netflix has had a few of it?s streaming contracts run out and can?t afford to renegotiate. It looks to me that they?re just too small to compete, and we?ll probably be getting our streamed content from one of the big guns soon.
  3. Well he mentioned in an email to his customers that they'll now be offering video games. If that's true, I'd be interested.
  4. gwailo247

    gwailo247 TechSpot Chancellor Posts: 2,007   +18

    It does not seem to make sense to waste the Netflix brand on the portion that is going to fail.

    If Netflix really felt that the streaming version was going to die and the DVD by mail version was going to live, they would retain the Netflix name with the more durable product, not start a completely new brand and then kill off the well known brand. Seems counter-intuitive.
  5. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,546   +430

    I don't think the streaming portion is going to fail. With them essentially 2 different companies now, Netflix, the streaming one, will be forced to get a better selection. The by mail option is only going to increase in price while streaming could get cheaper. USPS is in rough shape, so there will probably be an increase in mailing costs again.
  6. Vrmithrax

    Vrmithrax TechSpot Paladin Posts: 1,434   +413

    I think that's a little backwards. The physical media component will slowly atrophy as streaming media becomes more solid and varied. Plus, as was already mentioned, delivery costs of the physical media only stand to increase in the coming years, while bandwidth and streaming costs could conceivably drop.

    I think it's a split that will cause short-term confusion, but have long-term benefits. The split of DVD and streaming could get confusing, and has already had a little controversy regarding movie queues and crossover between the 2 delivery platforms. Making a clean split, sending DVD delivery off on its own path, keeps future confusion to a minimum - when you say "Netflix" from that point on, you are talking about streaming, just streaming. Splitting them off as 2 entities also helps with budgeting, bookkeeping, overhead calculations, investment determinations, etc. From a purely business standpoint, it makes obvious sense - and the simplification implied should mean more time/effort/money can be put towards acquiring better streaming content. At least, it had better mean something like that... Or your predictions of impending doom will come true :)
  7. its called corporate suicide
  8. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 3,151   +1,411

    It does make sense to use the established brand name on the portion you're trying to save. I don't think THEY think it's going to fail... but based on what I read in that CNN story (linked in the first post) it looks pretty grim for them.

    It's much different than the USPS...DVD mailing won't slow down for a while... there are many more people with a DVD player willing to pay for Netflix than are willing to pay $50 for broadband + Netflix with a terrible selection.

    Streaming IS the future... but netflix has 375 million to play with to buy content contracts. They're competing with Apple, Google, and MS who have billions and billions. I don't see how they're going to pull it off.
  9. Qwikster a well formulated name as the change to ............Quitster will be a simple affair
  10. ikesmasher

    ikesmasher TS Evangelist Posts: 3,050   +1,384

    does this mean that movies i actually want to watch will be on netflix now? :D

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