Monday, October 10, 2011 at 9:21AM Who knows what's going on over at NetFlix, but what has already been seen as a PR debacle is starting to look like a lack of strong leadership as well. This piece in the NY Times gives the details.
If you go to Qwikster.com, it just redirects to NetFlix now.
netflix, streaming services Monday, September 19, 2011 at 7:54AM NetFlix customers should be receiving an email today, further explaining the news, announced in July, that the service would be upping its prices for DVD+Streaming. That email confirms much of what I said at the time about NetFlix's stragetic position being one that's leaning toward streaming as the future. What I certainly didn't predict was a full-on spin off of the DVD service into a new company called Qwikster.com (I thought they would just phase out DVDs altogether at some point).
Here's a copy of the email I received this morning:
From Reed Hastings, Co-Founder and CEO of NetFlix:
I messed up. I owe you an explanation.
It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.
For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.
So here is what we are doing and why.
Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.
I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.
So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.
It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.
Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.
There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.
For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.
I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.
Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.
Respectfully yours,
-Reed Hastings, Co-Founder and CEO, Netflix
p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.
Friday, July 22, 2011 at 1:25PM Not that there was a ton of concern to the contrary, but Spotify appears to be the technical feat that everyone claims that it is. This isn't too surprising, since they've been refining the service in Europe for several years, and the version we see as the new, hot thing in the U.S. is actually the result of many iterations.
But how does it compare to other services? Well, it aims to be your everything, everywhere service: streaming music, the music you own, everything in one place. It pretty much pulls that off, so long as you don't mind installing software on your computer, rather than having a client on a web page - so old school.
So, why would you install something on your computer, when there are no-install options with Google and Amazon's offering? Speed. Demon speed.
The Spotify client isn't just another media manager and player; it looks a lot like iTunes or DoubleTwist, but it's the fastest thing around. I've got 12,000+ tracks in my library (local files), and searching through them is literally instantaneous. Even better? The delay between when you press "Play" and when your music starts is absolutely zero, essentially removing the buffering effect of cloud-based playback...but wait...Spotify's streaming IS cloud-based playback. So what gives? Well, besides simple speculation, I just don't know how they do it. Spotify's performance is so amazing, it's literally a feature all its own. For example, my girlfriend has a computer at work that's old, and generally slow at all things multimedia on the web. She hasn't been able to use any of the cloud-based services such as Google Music and Amazon Cloud Player because it locks up her browser. Spotify, however, still streams instantly for her, even on her older computer, and the experience has her spouting so many positive things about the service that I just had to jump in and give it a go myself.
If you don't have a Spotify account yet, you can request an invite to the free service (I used the free service and it's features alone for this post), or as mentioned before, if you want to pay for the premium service now, they'll let you in right away. I got an invite in just three days, so the wait for the free service doesnt' appear to be very long.
spotify, streaming services Monday, July 18, 2011 at 11:35AM 
"Everybody Loves Music"If you haven't yet caught the news, Spotify, the highly popular music streaming service from the UK, is now available in the US.
Here's a review comparing Spotify, Rdio, and MOG - the three leading streaming music services.
streaming services Tuesday, July 12, 2011 at 3:13PM While NetFlix isn't music, it's very much tied to the move toward digital content distribution of all sorts.
Today NetFlix took a major step toward their next strategic reality: going to a 100% streaming only service. What this means is, on or after September 1st, NetFlix will change the cost of DVD+streaming service from $9.99 to $15.98 ($7.99x2). Other than the change in price, there will be absolutely no change in the service that you receive if you're currently gettign DVDs+streaming.
So why are they changing the pricing plan? Why charge customers more for something they've already been doing at a lower cost for years? The answer is pretty simple: in order to head toward streaming only, they need to people to drop the DVD shipping option.
They actually tried to accomplish this by changing their prices already, somewhere around a year ago, by announcing a the DVD+streaming price change from $8.99 o $9.99. Even though that's a >10% price increase for (once again) absolutely no change in the service itself, it clearly wasn't enough to get people to cancel DVD shipping. After all, you could have changed your plan to streaming only, and SAVED >10% by going down to $7.99. But, the fact is, NetFlix seems to have so many fans that I'll bet hardly anyone had a problem paying the extra $1.
Well, not long after that happened, NetFlix really focused its message on getting new customers, based completely around the streaming only service, and tons of people signed up. Streaming only service, having been a massive success since then, NetFlix is ready to further accelerate their move away from physical media. From a business standpoint, the sooner they can stop shipping DVDs, the sooner they can spend that money on better distribution deals, so their streaming service will include absolutely everything that is currently covered in their physical DVD collection. NetFlix obviously believes that their streaming offerings are strong enough to practically gut their DVD-only business, and this is reflected by today's announcement of the price increase.
So, my money is on this: a year from now two things will have happened (or be about to happen). First, the streaming library will have drastically improved, and their streaming-only customer base will continue to grow at an incredible pace, meaning they won't care if a relatively small percentage of customers decide to cancel the service in reaction to today's announced price increase. Second, they will announce they are dropping DVD shipping service altogether.
The downside to this? Well, if I were working in one of NetFlix's DVD handling centers, I wouldn't expect to have a job handling DVDs for much longer. I'd either be looking for something new, or trying to move into some aspect of the streaming service. Love it or hate it, the days of physical media are numbered, and this is just one more reminder of that simple fact.
netflix, physical media, streaming services 
