Netflix to customers: Stop renting DVDs
The DVD-rental company Netflix has split into two companies -- a strategy possibly designed to move people away from their DVD-rental business.
Story from The Takeaway. Listen to audio for full report.
Netflix is splitting into two companies: a DVD rental company called Qwikster and a streaming movie company called Netflix. And customers are upset. The CEO, Reed Hastings, issued an apology saying, "I messed up."
The move may actually have been designed to move customers away from DVDs. Rebecca Greenfield, staff writer for The Atlantic Wire, says, "They're trying to force their customers to get over the DVD business."
If Qwikster sounds like a silly name, that may actually be the point. If the name sounds bad, customers may unsubscribe from the DVDs and keep the streaming movies. Greenfield says, "by changing the name, they're trying to push people away from it."
"They think that streaming is the future, and they're right," Greenfield says." But right now, people may not be ready for the move to only streaming. Greenfield says "people want both right now, because their streaming offerings just can't be as good as their full DVD library."
The company now hinges on content, according to Greenfield. If Netflix can get enough great content on their streaming service, people will subscribe. If, however, there isn't enough good content available on the site, people will unsubscribe to both the DVD service and the streaming service.
"Maybe people will get over it and realize that Netflix is their best option," Greenfield say, "but I don't think the apology is going to do it."
Here's what some current Netflix customers had to say on PRI's Facebook page:
Bryan Hegarty: There is no reason to kill the DVD service right now. But yes separating was the goal. The price raise reaction is absurd though. The things people raise a fuss about in this first world country is amazing.
Art Gilroy: If they offered online what they offer with the rental business I would concur. However, I can get at my local Library more current movies and TV shows (HBO for example) then currently offered online or through rentals. Great idea that needs to grow with the times.
Edva Kashi: I have a DVD-only account and I have no plans to get rid of it. Netflix will not stream movies to Linux machines and I don't own a TV or other streaming device. I've been a happy Netflix customer for 5 years and I'd be very disappointed to switch to another service if the DVD service went away.
Kristian Day Bad move. Up until now the company has been evolving perfectly, this was a move backwards. The Dvd is still strong. No need to split companies.
Clark Moss: I have a dvd only account. I'm happy with the price change as its cheaper now, and have no plans on leaving.
Mario Rups: A good company in BAD need of lessons in communications management. Like Clark, I'm happy that I now have a cheaper plan because the streaming component was removed. (Broadband is prohibitively expensive, and streaming will just give broadband providers an excuse to raise prices and impose restrictions, either on usage or on non-preferred sites.) And, like Kristian, I agree there was no need at all to split into two companies.
A.g. Blitzhosen: I'm currently debating whether or not to ditch the DVD plan. The only problem? Netflix's popularity in recent years caused what has recently become my local video store's inventory to wither. I am reaping what I in some way helped sow. It is unpleasant.
Branwyn Killian: I'm dropping Netflix right before my next monthly renewal. Between the price increase and now this, I think I'll put a little time into researching other options to save money and hassle.
Anne Spear: We dropped the DVD plan months ago. Steaming content is just a better way to go. Maybe they should have chosen a different scheme to phase out the DVD's, but I don't think it was a bad move for their company.
Delci Knight: I will keep both. I I have gotten rid of subscription cable, so the streaming is nice. There are many tv shows from the 80s and 90s that I want to rewatch that are not on streaming, so I like the DVD service. Not all theses shows are available at my library. Kudos to netflix streaming for finally including CC!
"The Takeaway" is a national morning news program, delivering the news and analysis you need to catch up, start your day, and prepare for what's ahead. The show is a co-production of WNYC and PRI, in editorial collaboration with the BBC, The New York Times Radio, and WGBH.