In an official blog post on the Netflix site by Reed Hastings, the Founder, Chairman, and CEO announced that the Qwikster idea has been terminated. The blog post specifically commented on the DVD and streaming part of the business and how they’re working to make Netflix stronger. Here is what Reed Hasting said in his blog post:
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. We’re constantly improving our streaming selection. We’ve 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. We value our members, and we are committed to making Netflix the best place to get movies & TV shows. Thank you.
What is unclear based on this statement is if the company will continue to launch the video game rental service that was announced to become a part Qwikster. Gaming Bus has attempted to contact Netflix about this detail; however, there was no response at the time of press. We will update our readers if we receive an official statement or if a public one is made in regard to this matter.
Last month Gaming Bus reported on the split of services coming from Netflix. This split would launch a new service, Qwikster, that would make the streaming and DVD rentals seperate. The Netflix name would handle all the streaming media, while Qwikster would handle the DVD side and begin a new service where customers could rent video games. This would also mean customers would see two different transactions on their account for each separate service, generating a lot of backlash as Crystal’s analysis pointed out when this was first announced.
Analysis: This obviously means that one of the main complaints, separate billing, has been addressed. Unfortunately, this means that the pricing change remains the same. It’s been a bumpy road with Netflix as of late, with their losing Starz‘s streaming contract renewal, but they have picked up on the very popular Walking Dead series for live stream.
After the announcement of Qwikster, the company took another dip in its stocks. At that time it was $130, the lowest Netflix had been in 52 weeks. This tells me the company has been watching how this will be received and played out, but is it too late for Netflix to regain its glory? Looking at the stock today, it was down to $111, showing us it has been steadily declining since that announcement. So while this isn’t the sharpest downturn for them, it’s certainly a hard one.
This data hints at how Netflix saw the loss in confidence through their stocks and took action. It’s great that they did, but I don’t feel that it was enough. The reason being is because they’re still keeping the same price scheme that they first announced. The whole reason Netflix became popular was because it offered a reasonably priced service with a convenience customers appreciated, and this new price scheme is almost doubling that.
For the time being, it doesn’t look like Netflix will reclaim its past glory. Maybe after the shock of the pricing has set in and after customers’ confidence is restored, then some customers might come back some day. It’s good to see Netflix is still trying to bring more content to their service, but nothing is guaranteed as we saw with Starz. Netflix needs to instill confidence in its customers again, but while today isn’t that day, I see this as a reasonable step forward.