Tech : Netflix’s split-up of mail order and digital movies divides loyal fan base
Our RAM is bigger than yours
Yesterday morning, I received an email with the opening lines: ‘I messed up. I owe you an explanation.’ The sender was someone I’d had a love/hate relationship with for years. And he delivered this message to hundreds of thousands of others. The culprit? Netflix CEO Wilmot Reed Hastings Jr.
The email was a senseless soliloquy of sorrow for recent wrongdoings and an introduction to new changes sought to validate prior offenses and brace the Netflix community for several major updates coming its way.
Founded in 1997, Netflix is an Internet media company that offers immediate streaming of select titles and a broader selection of DVDs through its convenient mail-order service.
While it has lived in relative harmony with its subscribers for more than one decades, the company made waves this past summer when it announced and enacted a price rate increase.
Hastings ensured in the email that the sly stint is a thing of the past. ‘There are no pricing changes. We’re done with that,’ he said. He may have spoken too soon.
Netflix’s newest proposal is the separation of its instant streaming and DVD-order services. According to Hastings, the split is a necessary change as Netflix services have hit a fork in the road.
‘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,’ he said in his email.
Apparently, the separation of services will meet this need. Netflix will continue to offer its online streaming capabilities, and the newly dubbed Qwikster.com will offer the DVD mail order service. Two separate accounts, two separate bills and two separate websites.
And while Hastings also announced that game-rental will be added on as a new feature, where it sits in this triad of services remains unclear.
Even Hastings acknowledges that this new model, although seemingly necessary, is far from ideal. The negative: The two websites will not be integrated, meaning the beloved ease and convenience that used to be synonymous with Netflix will evaporate, leaving the services more complex and messy than necessary.
‘So if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places,’ he said.
A hassle? Yes. But this new inconvenient model doesn’t seem to deter some subscribers from staying loyal to Netflix.
Junior entrepreneurship and emerging enterprises major Dillon Fitzgerald has been a satisfied Netflix customer for three years now and has no plans to take his business elsewhere.
‘I won’t change services, mostly because I don’t know of other services that do what Netflix does,’ he said. ‘And for the amount of movies they offer and how convenient it is, I don’t think there’s something better out there.’
Others disagree. According to responses to Hastings’ blog post on Netflix.com, too much damage may already have been done. As of Monday afternoon, comments on this post were just shy of 15,000. Many of these were disgruntled at best.
Jonathan Ortega, a blog commenter from Los Angeles, responded to Hastings’ statement: ‘It was an insult enough that you raised the price on me last month, right in the middle of the biggest recession since the Great Depression. But now instead of a sincere apology, all we get is excuses.’
In a market of fast-paced evolution where services must adapt or die, Netflix may just be doing its best to keep up. As a loyal Netflix customer, I’m standing by the company more for convenience and selection than anything else, but I can only hope that its continued adaptation to a new media landscape will be strides for the better.
Jessica Smith is a senior information management and technology and television, radio and film dual major. Her column appears every Tuesday. She can be reached at jlsmit22@syr.edu.
Published on September 19, 2011 at 12:00 pm




