I just got what I thought was a nice email from Reed Hastings who is the CEO and co-founder of Netflix. It at first starts out as an apology for not communicating why they were separating the DVD and streaming prices. Hastings then goes on to say how he wants to grow the streaming business and feels that is the way he will define Netflix and set it apart.
Hastings states how important the DVD service Netflix provides is important due to DVD being a popular format for movie publishing. He also acknowledges that many of Netflix members enjoy the DVD mailing service as well. Once again he points out how many members including himself enjoy the streaming options as well.
The email then shocked me by explaining that the two services will be split into two separate services and apparently businesses. The DVD mail service will be renamed to Qwikster while Netflix will be purely for video streaming. If you subscribe to both services you will have two separate entries on your credit card statement now. The claim is that there will be no price increase for separating into the two different businesses but then again they did already go through a price increase already that got some heated reviews by members.
The good news that was actually mentioned is that the new service, Qwikster, will have an add-on option if you want to rent video games. Hastings claims that many members have been asking for this option and he feels that with this new business model Qwikster can provide this.
Now many Netflix members are probably wondering what is the next step for them. Qwikster, Netflix, both or perhaps this may be the last step and they choose neither. There are already other services out there that provide DVD’s such as Redbox and there are plenty of other streaming companies as well that are trying to compete with Netflix.
I haven’t figured out what I plan on doing yet. What are your comments?
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