Netflix Splits Streaming and DVD

Jove · Sep 21, 2011

Immediately after I posted the article, I switched from 3 dvds at a time to just their streaming services. I watch plenty of television shows to last me at least 6 months to a year.

Has anyone tried Amazon's Instant Videos yet? I might give it a go, but it is not integrated with the Xbox 360.

Random McRandom · Sep 21, 2011

Amazon is quite affordable, especially if you have a prime membership. You can view their entire library of movies and television shows at no extra cost. A prime membership is $79 annually. It's cheaper than NetQuick or whatever their new name is, but they only have about 1/4 of the offerings.

Jove · Sep 21, 2011

Wired wrote an article comparing 8 netflix alternatives: http://www.wired.com/gadgetlab/2011/09/netflix-alternatives/

Netflix/Qwikster

Also known as Netflix: Redux. It’s the same service we know and love, only completely different. Faced with massive customer backlash in the wake of a price hike, Netflix split itself into two separate companies this week. The streaming service will retain the Netflix branding while the DVD-by-mail service will be named Qwikster. Netflix CEO Reed Hastings said the split will better serve customers in the long run because each company will be able to better focus on one type of service.

Netflix pioneered the DVD-by-mail service, creating an entire industry where one did not exist previously. But after serious flux in Netflix’s new pricing system — which split the streaming and DVD mailing services into two separate plans starting at $8 a month minimum — there’s no guarantee the company’s customers will continue to stick around.

WIRED: It’s been around the longest, and is the most familiar service. Massive offering of physical mail-away media. New game rental service sounds intriguing. Streaming to all iOS devices and Android smartphones.

TIRED Can you say price increase? We don’t like paying more money for the same service, and we’re failing to see how splitting the companies in twain is going to benefit consumers. Streaming-only service still lacks selection compared to DVD catalog.

Amazon Prime

Amazon’s elite-level service launched in 2005, offering two-day shipping on any of its products to members anywhere in the continental United States and other select countries for a reasonable $80 a year. Originally meant for those who couldn’t wait more than 48 hours for their tangible goods, Prime expanded in February to offer instant, streaming movie and TV show access to existing Prime customers at no added cost.

WIRED: Fast shipping on everything Amazon! What other movie service offers that? Lower yearly rate than Netflix and Qwikster. Works with over 100 different web-connected set-top boxes, including the ever-popular Roku.

TIRED: Smaller media selection compared to other existing services. Lacks the DVD rental option that made Netflix famous.

Redbox

Redbox made it possible for legions of supermarket shoppers to pick up a movie on the cheap, without having to make multiple stops. Instead of leaving the grocery store (or 7-11, Walgreens or what have you) with only a TV dinner and a Mountain Dew in tow, Redbox’s 30,000-plus DVD-rental kiosks make sure you won’t go home alone on a Friday night again.

WIRED: Cheap, cheap, cheap. DVD rentals average two bucks a pop, with anywhere from 50 to 200 recent titles to select from in each kiosk, updated weekly. Game rentals to roll out this year.

TIRED: No streaming service? Bummer.

Blockbuster

Once the dominant force in the media-rental industry, Blockbuster has fared horribly over the past few years. After scoffing at Netflix’s business model years ago, the big blue-and-gold company filed for bankruptcy last September.

However late, Blockbuster jumped on the bandwagon with its own Netflix clone mail-away service, but with the added advantage of allowing customers to return DVDs to brick-and-mortar Blockbuster stores. And finally, Blockbuster Express is a blue-and-gold Redbox rip, with kiosks placed in grocery stores and Kwik-E-Mart’s across the country.

WIRED: The Dish Network acquisition could mean big things for Blockbuster when (or if) the companies get a game plan up and running.

TIRED: Brick and mortar is slowly dying, so the leg-up Blockbuster has on Netflix with in-store DVD exchange may soon be moot. Ripping off its two major competitors shows a lack of ability to innovate, possibly signifying that the company is still behind the times.

Hulu Plus

At $8 a month, Hulu Plus offers instant streaming access to a wealth of TV shows only a day or so after they’ve originally aired. But seriously, if you’re paying a monthly fee, you shouldn’t have to deal with mid-show commercial breaks. That’s the whole point of paying for streaming service, right?

Still, I challenge you to find a more comprehensive archive of Hell’s Kitchen reruns on the web.

WIRED: Streaming to all iOS devices and some Android smartphones and tablets. Tons of TV shows that aren’t out to rent on DVD.

TIRED: Despite taking your $8 monthly fee, you still have to sit through asinine commercials. “Hundreds,” not thousands, of movies to choose from. Again, no physical media. Rights agreements sometimes complicate how many episodes are available for viewing on the site.

Android Market

Google has struggled to keep up with Apple in its media service offerings, only recently debuting its movie rental service on the Android Market in conjunction with a complete interface makeover. Fortunately, renting flicks from Google is available on all Android devices running version 2.2 and up — that’s something even Hulu can’t say.

WIRED:Rental ain’t pricey, averaging around two to five bucks a pop. Streaming to Android phones is nice. Compatible with PCs.

TIRED: No physical media. Not functional across all Android tablets.

iTunes and Apple TV

There’s a down-payment to get Apple TV up and running in your home, and it’s in the form of a small, sleek set-top box. Fortunately, it’s only $100.

Along with Netflix compatibility, Apple lets you purchase and rent movies from its iTunes media store, along with the ability to buy TV shows (due to lack of customer demand, Apple discontinued TV show rentals last month). Further, you’re able to watch streaming media on all of Apple’s mobile devices. The company wants to hook you into an Apple-centric world, and the interconnection between its services makes it easier for customers to buy in.

WIRED: Purchase prices are par for the course, ranging from $1 to $3 depending on whether you want to rent or own. Ability to buy entire seasons of a show is convenient. Rumors and speculation have long suggested bigger plans for Apple TV’s future, though Apple itself is staying mum on any potential developments.

TIRED: Lacks an “all-you-can-stream buffet” option, which can get costly if you watch a lot of flicks. Though its library is extensive, iTunes alone doesn’t contain the esoteric indie films that Netflix totes. So if you’re subscribing to Netflix and buying through iTunes at the same time, charges could add up fast.

Vudu

Wal-Mart got in on the media-services game in 2010 by buying Vudu, another streaming media company. Initially the service was available only in a set-top box version, but Vudu has since extended itself to other platforms as a standalone media service in and of itself, available to Playstation 3 users, Boxee for OSX owners and Windows-based PC users.

WIRED: Rentals and purchases stay on par with most other services, settling in the $1 to $5 range for rentals, and upwards of $5 for purchases. Titles available the same day they’re released on DVD, unlike other services that require waiting periods. Streaming video available on iPad.

TIRED: No monthly unlimited movie-streaming option.
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Nikilidstrom · Sep 21, 2011

Glory's Sun said: ↑

Amazon is quite affordable, especially if you have a prime membership. You can view their entire library of movies and television shows at no extra cost. A prime membership is $79 annually. It's cheaper than NetQuick or whatever their new name is, but they only have about 1/4 of the offerings.
Click to expand...

Thats not true. While they do have a large selection, they do not offer their entire online collection to prime members. For instance, you can only get up to season 4 of Doctor Who with Prime, and Castle isn't available at all. However you can buy season passes to both of these shows through Amazon Instant Video, or pay per episode.

Believe me, if their entire online library was available for a one time yearly fee, I'd gladly pay twice the price of Prime to be able to catch up on my shows whenever I wanted. Legally, anyway.

Random McRandom · Sep 21, 2011

I stand corrected. I haven't run into anything that I couldn't view without paying yet.. but I don't watch most television shows.

highjinx · Sep 22, 2011

found a new article today! looks like amazon might be eyeing the streaming portion of netflix to buy, hence the split...

http://abcnews.go.com/Business/wireStory/analyst-netflix-split-set-amazon-deal-14582021

highjinx · Sep 22, 2011

annd another...

http://perezhilton.com/2011-09-21-w...-their-company-into-two-services#.TnumDezl4j8

Random McRandom · Sep 23, 2011

Hmm.. I could see Amazon going this route.. but I don't think that Amazon has the power to make starz and sony change their minds. Without Starz and Sony, the offerings are still crippled.

Nikilidstrom · Sep 23, 2011

In an apparent brown-nosing maneuver, Netlfix announced today that they are going to have several Discovery Channel shows available for streaming, such as Mythbusters, Man vs Wild and Deadliest Catch.

But only previous seasons....

And only in the US.....

Bear Cub · Sep 23, 2011

Gee, thanks Netflix. It's so awesome that we get to pay for what might be the three most re-run shows on the Discovery Channel.

Jove · Oct 10, 2011

Good news everyone: http://mediadecoder.blogs.nytimes.com/2011/10/10/netflix-abandons-plan-to-rent-dvds-on-qwikster/?hp

Updated Abandoning a break-up plan it announced last month, Netflix said Monday morning that it had decided to keep its DVD-by-mail and online streaming services together under one name and one Web site.

The company admitted that it had moved too fast when it tried to spin-off the old-fashioned DVD service into a new company called Qwikster.

“We underestimated the appeal of the single web site and a single service,” Steve Swasey, a Netflix spokesman, said in a telephone interview. He quickly added: “We greatly underestimated it.”

Mr. Swasey said that the Netflix chief executive Reed Hastings declined an interview request. But in a statement, Mr. Hastings said, “Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”

Mr. Swasey declined to comment on any involvement by the Netflix board in the decision to keep the two services together. Initial reaction to the Netflix announcement was largely positive, and the company’s stock jumped 10 percent in pre-market trading.

Netflix said it never actually separated the services or started Qwikster. But the Sept. 18 announcement that it intended to do so stoked anger among Netflix customers, some of whom were already incensed by a price hike to $16 from $10 for those who receive both DVDs and streaming. (That increase will remain in place.)

In a blog post that day about the plan, Mr. Hastings wrote, “Companies rarely die from moving too fast, and they frequently die from moving too slowly.” His implication was that Netflix had to act aggressively to expand its fast-growing streaming service by severing its older, slower DVD-by-mail arm.

In a sentence that now seems like a bit of foreshadowing, Mr. Hastings also wrote, “It is possible we are moving too fast – it is hard to say.”
Netflix said that day that the separation would take effect in a few weeks. But tens of thousands spoke out against the plan on Netflix’s Web site and others, and Netflix stock slid sharply.

Three days after the announcement, Mr. Hastings wrote in a Facebook status update, “In Wyoming with 10 investors at a ranch/retreat. I think I might need a food taster. I can hardly blame them.”

The planned break-up was rooted in Mr. Hastings’ and Netflix’s belief that DVDs and online streams have different cost structures and different consumer demographics.

In July, to address the structural underpinnings of the business, Netflix announced that it would start charging $8 a month for both its streaming service and its DVD service, a total of $16 a month for the combination.

Previously, DVDs were a $2 add-on to the $8 streaming service. Of course, subscribers who only wanted one service or the other — most new subscribers only want the online streams — saw no price hike, but that fact was drowned out by the outcry.

Netflix expected some of its 25 million subscribers to cancel in the wake of the price change, but the cancellation rate exceeded expectations. The company said in mid-September that it expected to report a quarterly decline of about one million in the third quarter, which ended on Sept. 30.
But that guidance was given before the break-up was announced; Mr. Swasey said Netflix would not comment on whether the quarterly losses would exceed the already-lowered expectations. The company will report earnings and subscriber figures on Oct. 24.

On Sunday night, Mr. Swasey sought to reiterate what Mr. Hastings tried to say last month when he announced Qwikster: that Netflix had failed to communicate effectively about the price changes. “We had to look at the reality of what it cost” to mail multiple DVDs to households each month, Mr. Swasey said, noting that the round-trip postage alone for one DVD cost almost $1.

Under the plan announced on Monday, the price change will remain in effect, but the two services will not be untethered. That means that subscribers who want both online streams and DVDs won’t have to manage two accounts and pay two bills each month, after all.
Netflix tried to be crystal-clear about it, issuing a press release that was titled “DVDs Will Be Staying At Netflix.com” and sending e-mails to subscribers about the news.

“Netflix said in a Sept. 18 blog post that its DVD by mail service would operate at Qwikster.com,” the press release read. “Instead, U.S. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand.”

A plan for Qwikster to rent video games may or may not move forward; Mr. Swasey said it was “to be determined.”

Netflix, meanwhile, still has to concentrate on its online streaming service, which is widely considered to be its core business.

Next February, it is expected to lose the right to stream films from Walt Disney Studios and Sony Pictures Entertainment as a result of a failed renegotiation with the premium cable channel Starz. But it announced a deal last month with DreamWorks Animation to stream that studio’s films starting in 2013. Last week, it announced a deal with AMC Networks to stream old episodes of TV shows like “The Walking Dead.”

Netflix also remains interested in paying for the production of new TV shows. Earlier this year it ordered its first original drama, “House of Cards,” which is expected to have its premiere in late 2012. Now it is in talks to distribute new episodes of two cancelled TV series, “Arrested Development,” formerly of the Fox network, and “Reno 911,” formerly of Comedy Central. The past seasons of both shows can be streamed via Netflix — and can be rented on DVD, too.
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Random McRandom · Oct 10, 2011

Ok they straightened that shit out.. but whoop-de-doo, they are replacing Sony and Starz with Dreamworks and AMC.

the spiral continues.

Remy · Oct 10, 2011

I have had netflix since 04. And now cancelled the DVD part and may cancel the streaming part too, out of spite.
I mainly watch off the wall DVDs and foreign stuff that isnt popular enough to stream. I also like to save them to my HD for long military trips. Cant do that with streaming.
The local REDBOX is good for a few popular movies but again, I prefer the oddball stuff. So these days I have been finding most of what I want on .torrents .

nice comic craven

lionrock · Oct 10, 2011

Please disregard all of the above....

Jove · Dec 14, 2011

This makes me paranoid: http://www.slashfilm.com/netflix-bits-video-privacy-protection-act-verizon-eli-roths-hemlock-grove

Netflix’s shares may have dropped over the past several months, but as a news topic, the company is as popular as ever. After the jump:

Netflix supports a bill that would allow it to share your video rental and streaming choices with your friends

Rumor has it Verizon may be looking to buy Netflix

Netflix takes yet another step into original programming with Eli Roth’s Hemlock Grove.

Over the past few years, we’ve gotten used to sharing our locations on Foursquare, our musical tastes on Spotify, and our recently read articles on Facebook — and if Netflix has its way, we’ll soon be divulging our cinematic selections online as well. The company is putting its weight behind a bill in Congress that seeks to amend the Video Privacy Protection Act, which currently requires companies to get a customer’s permission before disclosing which videos you’ve rented or seen. If the new bill passes, companies like Netflix would be required to get consent only once in order to share your information continuously, rather than having to collect it on a case-by-case basis.

Netflix argues that the old law is outdated in the age of socialmedia, and points out that consumers would still have the choice to opt out of sharing entirely. However, detractors warn that the new law would give consumers less control over what they share and with whom. Furthermore, they point out, movie or TV choices may be a more delicate matter than, say, musical preferences, because the videos we watch can provide insight into our political, religious, or sexual preferences.

Netflix already offers a sharing feature for its Canadian and Latin American subscribers, which include an option to not share certain individual shows or movies. Competitor Hulu also currently offers a sharing option on Facebook. [NYT via Gizmodo]

Last week, we brought you news of a planned collaboration between Verizon and Redbox to launch a streaming Netflix competitor, but this week it’s looking like Verizon may be out to get Netflix in a much more direct sense. Netflix shares briefly jumped 6.8% Monday after reports surfaced that Verizon was considering buying the streaming/DVD rental company. However, the deal is far from certain at this point, with several analysts predicting that an actual takeover would be “unlikely” — as one noted to Deadline, “It would be far cheaper to buy Netflix’s subscribers than it would be to buy the service.”
What does seem clear at this point is that Verizon is determined to get into the streaming market, one way or another. Last week, Verizon CEO Lowell McAdam said his company had considered buying Hulu when the site was seeking a buyer earlier this year. [CBS News, The Hollywood Reporter]

Netflix’s move toward original programming continues with Hemlock Grove, a new horror/thriller show from Hostel helmer Eli Roth. The company is close to finalizing a 13-episode order for the show, which will be written by Brian McGreevey and Lee Shipman and directed by Roth. All three will executive produce, along with Eric Newman. Hemlock Grove marks Netflix’s third original series, after next year’s House of Cards and the recent deal for Jenji Kohan’s Orange is the New Black. In addition, Netflix also finalized a deal last month to exclusively distribute a new season of Arrested Development in 2013.

Based on McGreevey’s own forthcoming gothic horror novel, Hemlock Grove “re-imagines everything it means to be a monster as reflected in the struggle to be human” as the story unfolds “against the backdrop of our darkest myths, adolescent deceptions, ravenous relationships and rumors of a werewolf.”
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Jove · Mar 2, 2012

Yet another Netflix update: http://www.avclub.com/articles/netflix-wants-to-abandon-this-whole-netflix-thing,70121/

Continuing a trajectory that will make a fascinating cautionary example for some future business class, Netflix CEO Reed Hastings has made explicit his intentions to transform his company from a once-powerful titan of a unique industry into an ordinary cable channel, saying it was Netflix’s “natural direction” to be bundled in an ordinary cable package someday and provide an ordinary sampling of cable offerings. To that end, Hastings says his focus is on upping the original content in Netflix’s library to around “40 percent,” something he hopes to achieve by acquiring more programs like Lilyhammer, the upcoming House Of Cards, and of course, that new season of Arrested Development—and meanwhile, not worrying so much about losing huge swaths of the movies and TV shows that people signed up to Netflix to watch in the first place, thereby making that ratio more easily achievable.

“Eventually, Netflix could look like HBO, with 40 percent of the content its own and 60 percent coming from other sources,” The Hollywood Reporter concludes, because if there’s one thing the world is short on, it’s another cable channel attempting to copy HBO. “And to satisfy customers confused by the whole notion of ‘on-demand streaming,’ we feel it's our natural direction to revise our service to play movies and TV shows only according to a programming schedule,” Hastings added at a press conference approximately a year from now.
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I like my subscription thus far, but if they cancel dvd/tv rental/streaming services, I am deactivating my account.

jannista · Mar 2, 2012

I have a theater and the sound quality of internet streaming sounds horrible and looks bad on a 10 inch HD projection screen. thank God for Blu ray mail rental.

Fremen · Mar 2, 2012

jannista said: ↑

I have a theater and the sound quality of internet streaming sounds horrible and looks bad on a 10 inch HD projection screen. thank God for Blu ray mail rental.
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I hope you meant 10 foot HD projection screen.

I'm seriously considering cancelling my subscription.

highjinx · Mar 7, 2012

here's an interesting article about netflix taking on cable....

http://www.pcmag.com/article2/0,2817,2401252,00.asp

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