Netflix Dumps Qwikster Idea, Keeps DVDs

You may recall a couple weeks ago when Netflix announced it would be separating its DVD-by-mail service into a separate entity called Qwikster. Yeah, that’s not happening anymore.

A post on the Netflix blog written by CEO Reed Hastings says:

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password… in other words, no Qwikster.

While the July price change was necessary, we are now done with price changes.

While the whole thing comes off a bit disorganized, it’s probably a smart move on Netflix’s part to keep the DVD business, as many were speculating that separating it was only setting it up for a sale. The company is facing increasing competition, and it would do well to keep any competitive advantage it has.

While DVDs may eventually go away as a technology, the DVD-by-mail plan has long been Netflix’s strong point. In fact, it wasn’t that long ago that it just WAS Netflix. Then the streaming offering came along as a nice bonus (until they made it not a bonus anymore, earlier this year).

After Netflix announced the Qwikster separation, DISH Network announced its new rival Blcokbuster Movie Pass, which according to Blockbuster’s announcement includes: access to over 100,000 DVD movies, TV shows and games by mail (with no additional charge for Blu-ray), 3,000 streaming titles to the TCV, over 4,000 streaming movies to the PC, hundreds of on-demand TV shows, over 3,000 games by mail for Xbox, Xbox 360, PS2, PS3 and Wii, unlimited exchanges of DVDs and games at participating Blockbuster stores. It also includes over 20 premium channels like MGM, Epix, Sony Movie Channel, PixL, etc.

Perhaps Netflix decided it would not be wise to offer less formats while competitors offer more.

Netflix may also have to contend more with studios simply offering their own movies through Facebook or even their own websites.

Hastings did note in the blog post that Netflix has recently added “hundreds of movies” from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. “Plus, in the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS,” he added.

Last week, the company announced that it is getting past seasons of The Walking Dead.

There are 2 Comments. Add Yours.

Lionel Bachmann @ Model Trains
October 10, 2011 at 4:59 pm

I think this CEO needs to be fired. First he makes a lot of subscribers angry for increasing their price 60% and not giving them more services, but less by losing Starz content. Then he decides to split DVDs into a separate company, like that’s going to be good for the subscriber. Netflix has dug itself a hole, and now Blockbuster looks to be a formidable foe with more options for less money.
Steven G
October 10, 2011 at 5:37 pm

So is this like the Coke fiasco of the 80′s where Coke announced a new formula, people hated it, and then Coke brought back the original formula (well not the absolute original formula as Coke was first made with extracts from the Coca plant). I don’t see this flip flop to really help Netflix much. It really makes them look like they don’t know what they’re doing. I’d rather switch to Blockbuster because of game rentals and in store swaps for free movie rentals.