For the record, I like the instant streaming on Netflix. I had no problem paying for the streaming and the DVD delivery that Netflix was going to force upon subscribers.
By now, most people have heard the Netflix-Qwikster news. The second I read the news, I promptly brought up netflix.com and removed the DVD option from my account. I then found the Netflix DVD that I’ve had for like 4 months and sealed up the envelope. (For the curious, it was Disc 1 of the anime series, Gurren Lagann. Which, by the way, I didn’t need anymore cause it’s on the instant streaming list.) It’s on its merry way back to the nearest Netflix facility.
The concept of “Okay, we see that you all are rather pissed off about our price hike so we’ll help that by splitting up the company and still charging you the higher price, but we’ll split the price on you credit card since they companies will be different.” is a really bad position when your a consumer looking at this. Especially if you’re one that has been paying for both streaming and the DVD plan.
Split the company and still charge us the higher price. That makes everything better, right?
If that kind of a response was an apology, Netflix needs to look up the definition of “apology.” That’s a pretty sad conclusion that Netflix came to. The response Netfilx CEO Reed Hastings gave didn’t offer a solution to consumers. It’s just a backtracked, irrational justification for a big mistake that should have been handled better the first time around.
That said, in the end, this is probably going to be a good thing for Netflix. The DVD side of the business is falling. With more and more stuff going to to the streaming service, the DVD side of the Netflix business is going to keep declining.
According to a 2010 post by GigaOM’s Ryan Lawler, Netflix spent $66 million in the second quarter of 2010 to license streaming titles for its Watch Instantly service, compared with $9 million in the prior-year period. In comparison, Netflix spent $24 million on DVDs in Q2 of 2010, compared to $43 million during the second quarter of 2009. The numbers don’t lie. Not that it’s a very hard thing to fathom. The costs of streaming is much less than the DVD shipping.
We now will get to see another round of fallout from the Netflix price hikes. Will the users of both Netflix streaming and Qwikster DVD delivery be satisfied with the new direction? We’ll have to watch and see where this one goes.