Netflix splits DVD and streaming service

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Jory
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19 Sep 2011, 6:48 pm

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Netflix splits DVD and streaming service

19 September 2011 Last updated at 11:46 ET

Netflix has decided to split its DVD-by-post business from its movie streaming service.

The streaming service will keep the name Netflix but the postal DVD rental business will be renamed Qwikster.

The announcement comes two months after US firm Netflix bumped up the price of the combined renting and streaming service by 60%.

The price hike is thought to be behind the sharp drop in subscriber numbers Netflix has seen.

In July, Netflix reported that it had about 25 million subscribers. In an earnings report last week it said it now expected subscribers to number 24 million at the end of September.

The news caused shares in the firm to drop 19% which brought the total decline in its share price to almost 50% following the July price rise.

Netflix boss Reed Hastings took to the company's blog in a bid to calm the ongoing furore by explaining its reasoning behind the changes.

He said problems had arisen as Netflix evolved from the DVD rental business that spurred its initial growth to a company in which most of its customers were streaming movies via the web.

"...streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently," Mr Hastings wrote.

This was the reason it split DVD rental and streaming into separate businesses and charged for both, he said.

After the split, customers will be charged for each service they use and their bank and credit card statements will show separate payments. In addition, any feedback they give on good or bad movies via one service will not be mirrored on the other.

"Arrogance" based on past success meant the company neglected to keep its customers informed, he said.

"I messed up," he wrote. "I owe everyone an explanation."


(BBC News link)



bigcoop
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20 Sep 2011, 1:56 pm

I was one of the ones who dropped them. Redbox and Blockbuster Express are only $1 plus they send me promo codes all the time. Plus I can watch anything on www.1channel.ch



thewrll
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21 Sep 2011, 8:00 am

It's the same price as the price change plus the new dvd service seems at a certain point people will be able to rent video games.



mesona
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21 Sep 2011, 8:02 am

They lost me as well, who needs to pay 20 something a month for one DVD and streaming?


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21 Sep 2011, 10:56 am

Kinda bummed about this, but I'm sticking with them since they have WAY more classic and foreign films than Blockbuster and Redbox.



softlyspeaks41
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22 Sep 2011, 12:41 am

I've been a generally satisfied customer of their streaming service. But their movie selections are getting rather paltry. With all the hoopla about this part of their business, one would think they'd address this issue.



TheFangirl
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22 Sep 2011, 7:12 am

I dropped the DVD service and if I don't see some improvement in the streaming, I'll drop that too.


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jrjones9933
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22 Sep 2011, 7:47 am

I'm keeping both, for now. I don't mind paying enough for the service to remain profitable, and I know that the studios have squeezed them for more money for streaming.


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GoonSquad
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22 Sep 2011, 10:04 am

TheFangirl wrote:
I dropped the DVD service and if I don't see some improvement in the streaming, I'll drop that too.

This.


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22 Sep 2011, 10:49 am

They need to make the bonus features from the DVD's available for streaming online; that would set them apart from their competitors.



IdahoRose
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22 Sep 2011, 11:39 am

TheFangirl wrote:
I dropped the DVD service and if I don't see some improvement in the streaming, I'll drop that too.

This is basically the same stance that my family and I have too.



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26 Sep 2011, 4:55 pm

I was disgusted at all the changes at first, but then decided to stay with them and just reduce from 3 to 2 movies out a month, and cancel the streaming. But then they announced the separation of streaming and DVDs, and that now I would have to have two accounts. That sucks, so I just switched to Blockbuster and I watch streaming movies for free as part of my Amazon Prime account. That works for me!


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Darialan
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26 Sep 2011, 10:26 pm

Well, I'm sticking with them. I definitely support people's decision to quit one or both and switch to something else. I think it's dirty dealings going on between studios and Netflix. Not Netflix's fault studios are greedy little bastards. Besides I can't find the selections through streaming like Netflix and what about tv series like Dexter through DVD services like Redbox or Blockbuster. Do they even have that? I just don't want to think about switching when Netflix works the way it does so well. It'd be nice to offer us a discount for people who do both Streaming and DVD.



KathySilverstein
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07 Oct 2011, 3:03 am

Finally, to the last poster, you may be the only person in all of the Internet who agrees with my position to stick with them. I still think it's a good deal for the money. I use the streaming and dvds both nearly every day. It is not $20 for both, it's $16 for both. For like 21 it's 2 out. I think. I actually upped mine from 2 out to 3, which is the reverse of what most ppl did. Like I said, I love NF, and I get a ton of use out of it . It's like 24 for 3 out + streaming, approx.


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hartzofspace
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07 Oct 2011, 10:06 am

Well I gave Blockbuster a trial run, and they screwed up already. First, they sent out 2 DVDs. One of them was cracked. When I reported it online, they said that they would send a replacement promptly. After nearly a week, I checked my queue. Not only did they have the wrong DVD listed as returned, they hadn't sent out my replacement. So, I called them. Then I found that their customer service team is outsourced. I could hardly understand what the woman was saying. But I finally got her to understand that they had not acknowledge receipt of the damaged movie, had the wrong movie listed as returned, and had never sent me a replacement. So instead of sending me the replacement of the damaged movie, they sent the next one in my queue. This one looks pretty scratched up. Since this is only a trial, I will be canceling with Blockbuster. I guess I will return to Netflix; or rather, what will be Qwickster. :?


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