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Netflix Continues to Receive Market Beat Down
- Thread starter HardOCP News
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The way they have gone about this is cackhanded and the name Qwikster is possibly the worst name they could have come up with but Netflix will recover. Their streaming service is very good. $8 a month, no comercials... Ok, not many brand new releases but there is content there you simply can't get anywhere else.
Compare that to cable, full of ads, very expensive and the same shit on repeat, when I watch cable all I do is flick channels for an hour, don't even watch anything.
I'm glad of the change, netflix is cheaper now as I will drop the DVD's and just rent new releases from the local video store or redbox.
Their stock will recover, they were a beloved company and that is why people are outraged, but once they go back to cable people will realise even netflix's dumbass CEO is nowhere near as bad as those guys.
Compare that to cable, full of ads, very expensive and the same shit on repeat, when I watch cable all I do is flick channels for an hour, don't even watch anything.
I'm glad of the change, netflix is cheaper now as I will drop the DVD's and just rent new releases from the local video store or redbox.
Their stock will recover, they were a beloved company and that is why people are outraged, but once they go back to cable people will realise even netflix's dumbass CEO is nowhere near as bad as those guys.
my point of the CEO is in the stock price. Both company's stock as plunged because of their actions. Also, i'm in canada, netflix up here is awful so... yeah.
Tawnos
2[H]4U
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For 7.99 a month, you can buy a movie every month or a TV show season every two. With a couple friends doing the same thing, you can just exchange stuff or rotate who is buying (4 friends, 4 weeks, 1 movie night a week).
In other words... is netflix really that good of a deal?
In other words... is netflix really that good of a deal?
I see it as a business strategy.
Look, DVDs are becoming a thing of the past. Everbody knows it. It costs them too much to keep up with the physical media and it costs money to mail the media out.
The DVD side of the business is doomed. It's going to die, they realize that, so what they're going to do is seperate it from the "Netflix" brand and when it does die, "Netflix" is not affected.
As for price increases, yes, they're right, streaming has taken off it's the future of "Netflix" until the newest form of media delivery is developed. As a result of that, the demand of service has exponentially increased and they have to supply that demand. If they fail to do so, the company fails.
When demand increases and supply needs to increase, costs will increase accordingly. Now, customers will respond to these increases... they will either accept the new price increase or they will rejected. It's a balance. If too many people reject it, they will lower the price. If too many people accept it, then they will continue to increase the price until people leave it. I personally think this is right in their target area as far as pricing.
As far as their issue w/ 30 days... that is not their fault. That is an obstacle they're trying to overcome. Studios like (Universal, WB, Lionsgate, etc) get paid big $$$$ from TV Networks (TBS, FX, USA, etc) and Service providers (Comcast, Dish, DirectTV, Cox)and they have grouped together to block Netflix from being able to attain movies as they're released because they see it as a HUGE threat. So they put licensing and HUGE price tags on new releases because they know Netflix can't afford it...
I think Netflix is doing the right thing by seperating a dying market from them and focusing on what is ahead... online media streaming.
Though, I can disagree with the way they market it... They need a new marketing director and not have the CEO sit there and explain what they're doing and saying "I'm sorry" or "I don't care what people say." It's bad PR and it's hurting them.
This hickup is good for me now that their stock prices are down, I'm doing a little investing with them.
Look, DVDs are becoming a thing of the past. Everbody knows it. It costs them too much to keep up with the physical media and it costs money to mail the media out.
The DVD side of the business is doomed. It's going to die, they realize that, so what they're going to do is seperate it from the "Netflix" brand and when it does die, "Netflix" is not affected.
As for price increases, yes, they're right, streaming has taken off it's the future of "Netflix" until the newest form of media delivery is developed. As a result of that, the demand of service has exponentially increased and they have to supply that demand. If they fail to do so, the company fails.
When demand increases and supply needs to increase, costs will increase accordingly. Now, customers will respond to these increases... they will either accept the new price increase or they will rejected. It's a balance. If too many people reject it, they will lower the price. If too many people accept it, then they will continue to increase the price until people leave it. I personally think this is right in their target area as far as pricing.
As far as their issue w/ 30 days... that is not their fault. That is an obstacle they're trying to overcome. Studios like (Universal, WB, Lionsgate, etc) get paid big $$$$ from TV Networks (TBS, FX, USA, etc) and Service providers (Comcast, Dish, DirectTV, Cox)and they have grouped together to block Netflix from being able to attain movies as they're released because they see it as a HUGE threat. So they put licensing and HUGE price tags on new releases because they know Netflix can't afford it...
I think Netflix is doing the right thing by seperating a dying market from them and focusing on what is ahead... online media streaming.
Though, I can disagree with the way they market it... They need a new marketing director and not have the CEO sit there and explain what they're doing and saying "I'm sorry" or "I don't care what people say." It's bad PR and it's hurting them.
This hickup is good for me now that their stock prices are down, I'm doing a little investing with them.
Monkey God
Mangina Full of Sand
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Yes, convenience. I have the two disk/month plan. I watch two movies a week, on average. The money is low enough that its not a big deal. Going online and managing a queue works really well, as does their rating and recommendation system. Most of the movies I watch on Netflix, I would have no idea they even existed. Foreign films, independents. Shit you dont see on the counter at walmart or somewhere else.
Tawnos
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I buy almost everything via amazon or the bargain bin. Best thing is that once I've bought it, I own it and don't have to keep paying for it. So six months a year, whatever from now I can loan it to a friend, watch it again, etc.
Hell, if you're willing to get used dvds (which is what netflix was essentially sending you), you can go as low as $1/dvd.
I'm strongly considering this myself. Im not sure whether to buy now or wait another day or 2 but I've been watching it pretty close.
Monkey God
Mangina Full of Sand
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If I like it, somehow a copy of it manages to find a way to my hard drive. This way, I don't have to buy movies I don't know if I like or not. Some of the movies I get from netflix are horrible and I am glad I don't own it.
So what's next? Outsourcing the DVD mailing to India?
Oh crap! I just gave them an idea... Sorry everyone...
We'll be getting Bollywood remakes of every movie ever made.
Tawnos
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If I like a book, I illegally make copies as well. It simplifies the whole process, you know.
piscian18
[H]F Junkie
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I can't imagine what the next board meeting was like after the quickster news. I hope it went like this
http://www.youtube.com/watch?v=kgMiLYF-sM4
http://www.youtube.com/watch?v=kgMiLYF-sM4
The sad thing is they offered a feature for free, then doubled your price because of that feature. Well lets see how they stack up. If Digital Downloads was worth the same as the DVD rentals, then why is the selection only about 10%. How come they are the same price when likely mailing these discs cost 10x as much based on their CEO's statement that a HD download cost 4 cents in bandwidth. How come they do not add common features like kids accounts with parental locks of different rating or types of movies. How much is their streaming? This makes no sense. I will keep getting Blu-ray until I am bored with it, but the streaming service is now gone.
Buying and shipping out dvd's are entirely different beasts compared to digitally streaming them from a Terms of Use standpoint. Netflix has to pay oodles of cash to stream movies and tv shows, they dont for dvd's.
dj_spanmaster
Limp Gawd
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And, in the next couple of weeks, I'll be investing in Netlix/Qwikster. Why? (1) They're established. (2) They serve a market that already exists. (3) They've got innovative plans (ex: Netflix' internal studio production). (4) The current market value drop is tied directly to temporary anguish over price schemes and comments. All of those things point to a company (or, companies) that will stick around, ultimately regain value, and pay nice dividends.
It's getting worse:
And the trading volume today has passed 30 millions shares, which looks at least twice as large as yesterday's trading.
The share is now at $130.10, compared to over $300 2 months ago ($304.75 on interday trading.)
Even if it's only 10%, that's 2.5 millions subscribers, not the 1 million Netflix planned.
And the trading volume today has passed 30 millions shares, which looks at least twice as large as yesterday's trading.
The share is now at $130.10, compared to over $300 2 months ago ($304.75 on interday trading.)
Kind of like an all-you-can-eat buffet. If you're someone who can scarf down several plates of food when your hungry, then they can be a good deal.
But if you are someone who can barely finished half a plate when you go out, then buffets are NOT a good deal, and you are better off in a regular resturant paying by the item.
This is what people are forgetting when complaining about the price hike.
If I like a book, I illegally make copies as well. It simplifies the whole process, you know.
"simplifies" eh.
I understand price hikes to get more content, but I don't understand completely seperating streaming and through the mail. Why form a new company with a stupid name and make it more of a hassle for customers. Why not just have them as separate divisions within the same company and as the dvd's by mail side slowly dies just steadily cut back on the resources it gets. Sure it may cost a bit more money, but you're not pissing off your customers as much that way.
Of course I have no real faith in them increasing their streaming content if for no other reason than the studios are unreasonable. That's why I canceled my subscription over a year ago. Shit for new releases, having portions of TV seasons by mail only for no apparent reason, a limited selection of movies worth watching new or old, etc etc.
If only the studios would embrace streaming rather than screwing it over they'd end up making much more money in the long run and even if they only make just as much money as they currently do at least they won't go bankrupt; because they refuse to change with the times.
Of course I have no real faith in them increasing their streaming content if for no other reason than the studios are unreasonable. That's why I canceled my subscription over a year ago. Shit for new releases, having portions of TV seasons by mail only for no apparent reason, a limited selection of movies worth watching new or old, etc etc.
If only the studios would embrace streaming rather than screwing it over they'd end up making much more money in the long run and even if they only make just as much money as they currently do at least they won't go bankrupt; because they refuse to change with the times.
To me the Blu-ray option is the only option worth anything. Streaming has *exactly* $0 value for me. I didn't purchase an extremely nice HT system to have garbage audio as a source.
Lets see:
1) Netflix "HD" video content is like 2-3 Mbps. Blu-ray video from the disk is 20-50 Mbps. Guess which picture looks better? It's not even a matter of proximity, the Blu-ray picture is vastly superior. To my eyes Netflix "HD" looks similar to a standard DVD, ie. not that impressive now-a-days.
2) I want DTS-HD or DD-HD audio. Heck, the last tiem I checked Netflix didn't even support standard DD. If I wanted matrix audio, I'd hook up my VHS player.
3) Blu-rays delivered to my door? Yes, please. I'd spend $13 in a month on gas driving to the video store (and back to return it) few times. The convenience alone is worth it, and even in the worst case scenario I break even cost wise.
bboynitrous
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That's the thing, it wasn't to get more content. From most of the news I remember it was just to KEEP their current content and licenses. I also remember a month ago about them losing Stars and trying to pull HBO. If they aren't going to add anything or at least say they are, jack up the prices, change the name of their DVD program and continue to deliever mediocore service then what the hell are people even considering staying? Is it so they can cash in before they tank?
bobdabilder
Limp Gawd
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For all the people that say "it's still a great deal, people need to grow up": this is what capitalism is all about. I don't like the model and won't pay the price. It doesn't matter if it's worth it or not. It's all about the customer.
My background: I've been a Netflix member since Jan 2007. I get 3 movies at a time, and I sometimes go through 3 a week or sometimes sit on 3 movies for several months. I use the streaming service on average about every 3-4 days. My physical queue is 250+ (all of which I want to see) and my streaming queue is about 120+, maybe 25% of which I *want* to watch (see #3 below). Until this month, I've been a relatively happy customer for what it costs me.
1. It's funny that people are apologizing for Netflix and making the excuse of the DVD service dying or dragging the rest down. To that I say, "So?" If that were to happen, then you just shut that service off. Sort of like removing unpopular stations from Sirius XM radio. You just say, "We, Netflix, no longer find it useful to offer our DVD shipping service." And that's it! You don't spend more money to split them off while disrupting your customer base and looking like you don't know what you're doing.
Unless your goal is to sell it in the very short term. Then you need to split it now. I doubt they could otherwise sell half their business without a class-action lawsuit. You sold my what to who just because you don't want to do that service anymore?!
2. Don't forget that Netflix is a captive consumer to movie media publishers. And it's not like Netflix can badmouth them and pass any proper blame; they'd never get a good deal again! Besides, why would Netflix *not* offer every movie they could to their customers?
3. Netflix streaming is awful, entirely due to the selection. It's true, I've watched plenty of really good movies I had never heard about until I saw them pop up as new in Netflix. But a remarkably few number of movies that I *want* to watch are available on streaming. I continue to hold out hope that the selections get wider, and I'll happily tag along and pay a higher price for both plans, but splitting the services up really forces me to make real decisions rather than coast along...which sucks because their service is highly convenient and easy to use and I don't have to worry about DRM or ads or what the streaming company is doing with my data...
Oh, and it doesn't work on Linux, which is highly annoying.
In all, the streaming service, while nice, is just not worth nearly as much to me as the physical disc delivery. I guess that might show my age, but it also means I can always watch nearly anything in the best quality with my own equipment.
There are way too many times where I sit down to watch something on Netflix, scroll through my streaming queue, and just don't find myself in the mood for any of what is available, while I'd watch almost anything in my physical queue any time.
1. It's funny that people are apologizing for Netflix and making the excuse of the DVD service dying or dragging the rest down. To that I say, "So?" If that were to happen, then you just shut that service off. Sort of like removing unpopular stations from Sirius XM radio. You just say, "We, Netflix, no longer find it useful to offer our DVD shipping service." And that's it! You don't spend more money to split them off while disrupting your customer base and looking like you don't know what you're doing.
Unless your goal is to sell it in the very short term. Then you need to split it now. I doubt they could otherwise sell half their business without a class-action lawsuit. You sold my what to who just because you don't want to do that service anymore?!
2. Don't forget that Netflix is a captive consumer to movie media publishers. And it's not like Netflix can badmouth them and pass any proper blame; they'd never get a good deal again! Besides, why would Netflix *not* offer every movie they could to their customers?
3. Netflix streaming is awful, entirely due to the selection. It's true, I've watched plenty of really good movies I had never heard about until I saw them pop up as new in Netflix. But a remarkably few number of movies that I *want* to watch are available on streaming. I continue to hold out hope that the selections get wider, and I'll happily tag along and pay a higher price for both plans, but splitting the services up really forces me to make real decisions rather than coast along...which sucks because their service is highly convenient and easy to use and I don't have to worry about DRM or ads or what the streaming company is doing with my data...
Oh, and it doesn't work on Linux, which is highly annoying.
In all, the streaming service, while nice, is just not worth nearly as much to me as the physical disc delivery. I guess that might show my age, but it also means I can always watch nearly anything in the best quality with my own equipment.
There are way too many times where I sit down to watch something on Netflix, scroll through my streaming queue, and just don't find myself in the mood for any of what is available, while I'd watch almost anything in my physical queue any time.
I cancelled after they raised prices. The streaming selection is terrible, and not worth the money they want for it. I was going to keep the disc delivery, but I decided I rather just ride my bike up to Redbox and rent a Blu-ray for $1.50 once a week or so.
I'm still with Netflix (for now), but quite simply they were getting more money out of me before. Now I get to pay them less (albeit for slightly less service, but I hardly used DVD by mail anyways), which is not so good for business.
On another note his most recent apology letter just kind of irritated me more than anything. I would equate it to adding fuel to an already well-lit blaze. I think he should have left well enough alone. You know, as if the pricing changes didn't irritate enough people...let's go and change billing, site integration, names, etc. I guess he must live by the saying of go hard or go home, because he's definitely going hard with his changes. As far as I'm concerned I know a great place he can stick his fancy red envelope that he's so enamored with.
On another note his most recent apology letter just kind of irritated me more than anything. I would equate it to adding fuel to an already well-lit blaze. I think he should have left well enough alone. You know, as if the pricing changes didn't irritate enough people...let's go and change billing, site integration, names, etc. I guess he must live by the saying of go hard or go home, because he's definitely going hard with his changes. As far as I'm concerned I know a great place he can stick his fancy red envelope that he's so enamored with.
PLEASE OH GOD PLEASE read what netflix pays fo content come Febuary.. THEY CANNOT add more and make more money.. I really hate these Netflix bash threads (what is netflix the new Sony?).. not the bashing part,Please bash away if you know the costs. But the total lack of understanding what netflix will be paying for streaming in the near future is what gets me. "still made more money" yes for 4 months that would be true.Then when current contracts expire they will lose money. Google is your friend, it has NEWS stories that dont sensationalize this to grab page hits, but actually provide facts, costs down the line and lack the bashing.
The studios want Netflix gone, they never figured streaming wouldbe a succes, they had failed at it already.. if you love those $3 rentals (redbox is great, but its not as widespread as traditional rental places, and 30 movies in a red box sure doenst compare to 1000's in a store).. and... guess what?!!! redbox will be raising prices soon too.. the Studios dont want $1 rentals..
Monkey God
Mangina Full of Sand
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Went to go mess with my plan to get streaming taken off and Blu-Ray added, and I get this:
Our web services are currently unavailable. You will not be able to change your plan at this time.
Warm and fuzzies, I dont have them.
Our web services are currently unavailable. You will not be able to change your plan at this time.
Warm and fuzzies, I dont have them.
If anyone thinks this separation is a good idea, log into your netflix account and browse through the "watch instantly" tab - pretend the "browse dvds" tab is gone. You are now looking at the "new" netflix. See all those great movies and shows? I didn't think so. How does netflix expect customers to pay for that steaming pile of garbage? It seems like the dvd library is several times larger than the streaming library.
Regardless of their financial issues, the netflix leadership has proven that they lack basic planning and customer service skills.
And why does everyone keep saying that discs are doomed to be obsolete? I know it's true, but everyone is acting like nobody will want a disc next year. I guarantee that it's not happening in the next year, or even the next two years.
That's like saying that gasoline-powered cars are doomed to be obsolete. We don't see Toyota splitting into "toyota the electric car company" and "wheelster the gas car company". They sell both. They will adjust the ratio each year so their customers don't abandon them. They also know the infrastructure does not exist to support such a move. Well wake up netflix, the US does not have good enough broadband structure to support you. In fact we lag behind the rest of the world. So when I want to watch the Avengers at home next year, I won't even consider streaming it. I kind of like full HD with reference quality sound.
Regardless of their financial issues, the netflix leadership has proven that they lack basic planning and customer service skills.
And why does everyone keep saying that discs are doomed to be obsolete? I know it's true, but everyone is acting like nobody will want a disc next year. I guarantee that it's not happening in the next year, or even the next two years.
That's like saying that gasoline-powered cars are doomed to be obsolete. We don't see Toyota splitting into "toyota the electric car company" and "wheelster the gas car company". They sell both. They will adjust the ratio each year so their customers don't abandon them. They also know the infrastructure does not exist to support such a move. Well wake up netflix, the US does not have good enough broadband structure to support you. In fact we lag behind the rest of the world. So when I want to watch the Avengers at home next year, I won't even consider streaming it. I kind of like full HD with reference quality sound.
The problem is that the DVD side of the business doesn't not have a large profit margin anymore and it's getting smaller and smaller to the point where it doesn't make any money or it starts losing money. By splitting it to Qwiksters, Netflix stock will be less likely to be affected when Qwiksters is shutdown.
Any sensible business owner know not to pump their investments into a dying product. Don't shut it down right away, you need to wean the users off and attempt to bring them over to Netflix.
I almost consider them a re-birth. They may not have a large selection now, but they can start focusing on getting better selections and better delivery options. If they screw that up, then yes, Netflix will go under.
As far as the car analogy, that is completely different, the government heavily regulates this market by placing HUGE taxes on car companies that do not meet a certain mpg or CO2 output on their vehicles. When you see regulation that forces manufacturers to put out a certain product, they will resist the amount of Electric Cars and Hybrid available to the market. Califonia tried to force regulations on car manufactures earlier, the Zero Emissions Mandate (I think thats what it was called) and it it was shut down due to resistance from the car manufactures.
My watch instantly tab includes All episodes of Scrubs, 30 Rock, Arrested Development, Buffy the Vampire Slayer, Mad Men, SNL, etc etc etc.
That is so worth the 8 bucks a month to me alone, I can hardly express it.
GreenMonkey
2[H]4U
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I think the only reason we still have the streaming service is for the kids...Blue's Clues, Dora, etc...
There's stuff to watch, but my wife is very unhappy that she can't get her foreign films, niche indy films, and some anime etc now (OK, well, the streaming isn't bad for anime, but still). She can't redbox that stuff either, but she couldn't see paying $18/mo for both.
It's funny. It was a fantastic value at $10 or so, but at $18-$20, it's not worth it, and neither service alone feels like it's worth $10/mo.
There's stuff to watch, but my wife is very unhappy that she can't get her foreign films, niche indy films, and some anime etc now (OK, well, the streaming isn't bad for anime, but still). She can't redbox that stuff either, but she couldn't see paying $18/mo for both.
It's funny. It was a fantastic value at $10 or so, but at $18-$20, it's not worth it, and neither service alone feels like it's worth $10/mo.