Fixing Netflix/Qwikster

[Aminka Ozmun]

Wow, this is bold thinking!

Dividing up your forces can work or not work, depending on the situation!

And some folks even think it's all just a secret ploy in advance of a sellout: separating into two components makes a sale more likely!

Another Yahoo! right before our eyes??

No way Netflix can compete with Amazon or Apple, which will always outbid it when it comes to streaming rights. And discs-by-mail is dying and will be dead within another decade (right?), so...wow, what to do???

[VinceG]

Discs by mail will probably be around for a long time, as it's the only way to get true HD video to consumers. Infrastructure moves glacially.

[SnerpGoodWord]

I think they're OK from a positioning perspective. The mistake was more in the realm of a bungled launch and bad name. Neither is as big a deal as it appears now.

In the long run, I think the bigger risks to their success are

1) Failure of the post office

and

2) A low-latency but low-bandwidth model for the internet (which we're starting to see)

[DBV]

Good decision. Streaming will be main thing in 3 years and Netflix can succeed, esp if they lower prices.. Separation is good, could let them sell the DVD biz and focus on one thing. It's a risk, but I like it!

[Le Roi]

I think it's a mistake to split the company into two. Netflix's business isn't the specific delivery method, but it's about ensuring people can order and watch movies from their own home. Splitting it into two companies makes them less efficient at being able to deliver on their service - because now people will have to choose between two different structures.

The founder is scared that Netflix will be made irrelevant in the same way that Netflix was a big part in making Blockbuster irrelevant. I think it's wise to heavily invest in streaming as that seems like the future. However, I don't really see the unique value that Netflix will add to watching movies if they only stream since streaming is something that is much more easily duplicated by other big net companies.

Thus, by splitting off the DVD sections from Netflix itself, Netflix won't really have much of an added advantage compared to other companies like Amazon. So, they are shooting themselves in the foot, lessening their competitive advantages before DVDs are outdated.

I also think DVDs will still be around in 3+ years. You still have plenty of DVD rental places in town, even if there are fewer locations and fewer DVD rentals than before.

It feels to me like the Netflix Founder is afraid of Netflix becoming irrelevant, and this fear is driving him to do things that will be making his company irrelevant.

[DBV]

Originally Posted by Le Roi

I think it's a mistake to split the company into two. Netflix's business isn't the specific delivery method, but it's about ensuring people can order and watch movies from their own home. Splitting it into two companies makes them less efficient at being able to deliver on their service - because now people will have to choose between two different structures.

The founder is scared that Netflix will be made irrelevant in the same way that Netflix was a big part in making Blockbuster irrelevant. I think it's wise to heavily invest in streaming as that seems like the future. However, I don't really see the unique value that Netflix will add to watching movies if they only stream since streaming is something that is much more easily duplicated by other big net companies.

Thus, by splitting off the DVD sections from Netflix itself, Netflix won't really have much of an added advantage compared to other companies like Amazon. So, they are shooting themselves in the foot, lessening their competitive advantages before DVDs are outdated.

I also think DVDs will still be around in 3+ years. You still have plenty of DVD rental places in town, even if there are fewer locations and fewer DVD rentals than before.

It feels to me like the Netflix Founder is afraid of Netflix becoming irrelevant, and this fear is driving him to do things that will be making his company irrelevant.

Disagree on two businesses making them less efficient. Exact opposite, they can now have two teams, two budgets and see how stuff works out for each of them. If same team has to worry about building up streaming biz and keeping DVDs than that's not efficient..

Never really rented a DVD btw... bought them, not rented..

[Aminka Ozmun]

Good point, VinceG and SnerpGoodWord -- sometimes I forget I live in "the greatest country on earth!"

[Aminka Ozmun]

Originally Posted by DBV

Good decision. Streaming will be main thing in 3 years and Netflix can succeed, esp if they lower prices.. Separation is good, could let them sell the DVD biz and focus on one thing. It's a risk, but I like it!

Apparently there's already a backlash over this latest move, too!

I personally don't like it, at least where complete and total separation of content queues are concerned. It's almost as if they're encouraging existing customers to choose only one or the other! After all, I'd hate the hassle of checking back-and-forth between Netflix and Qwikster to see whether some title in my Qwikster queue has suddenly become available on Netflix, and so would probably just decide on one service or the other....

[Aminka Ozmun]

It's a gamble, LeRoi, a desperate but perhaps necessary one. Maybe Netflix sees some handwriting on the wall that we don't and feels it high time to jettison legacy services...?

[Shift]

I think someone alluded to it already but many internet providers now have internet caps. For my internet, it's a measly 10GB/month. In other words, no Netflix.

Certain companies want to make a cap the standard, for both the US and Canada. If that were to happen, streaming is going to be severely limited. On top of that, it's also important to remember that there are parts of North America that don't have internet connections that can support online video. I think that DVD is far from dead.

As for splitting the companies, good idea and I think it's a little late. The models are totally different and keeping them as the same company would likely be a managerial nightmare.

Of course, I don't think there's anyone here who knows the inside scoop. It could very well be for a sale and if so, good for them. The founders might want to move onto other projects/want to retire/lost interest... who knows?

[cacheborn]

Here's what Oatmeal say about the whole thing.

Why Netflix is splitting itself in two - The Oatmeal

[DBV]

Originally Posted by Aminka Ozmun

Apparently there's already a backlash over this latest move, too!

I personally don't like it, at least where complete and total separation of content queues are concerned. It's almost as if they're encouraging existing customers to choose only one or the other! After all, I'd hate the hassle of checking back-and-forth between Netflix and Qwikster to see whether some title in my Qwikster queue has suddenly become available on Netflix, and so would probably just decide on one service or the other....

Well, no wonder, big changes get big reaction. Some like it some won't.

I think it's a good idea BUT depends on how they execute it, if they make two integrate seamlessly with no hassle for end user then it should work out. But if they execute it poorly then they will be critiqued for awhile until they get it right..