Pushing Aside the Red Envelope

Learned via Atrios that Netflix is officially splitting of its DVD-by-mail service from its streaming video service into a separate business rebranded as Qwikster (Wired’s article offers a pretty good overview of what’s happening, but see also the Los Angeles Times). Overly cute misspellings aside, this move doesn’t make a great deal of sense to me. As Atrios points out, Netflix is not alone in offering relatively limited catalogs of streaming films that can be viewed on a computer or TV set. In fact, I’d argue that Wal-Mart’s Vudu and Amazon offer relatively competitive (if not better) catalogs, especially for new releases.

In fact, what gave Netflix its reputation was its ability to deliver access to more obscure titles that you couldn’t find at your local video store, often in just a day or two. In fact, Netflix’s DVD-by-mail service was one of the most prominent examples in Chris Anderson’s discussion of “the long tail,” the idea that consumers wanted access to deeper catalogs. You could get lesser-known movies and TV shows quickly and easily. Now, Netflix seems to be pushing that aside for something else, and given that Netflix’s deal with Starz is set to expire, their primry source for new movies is also about to disappear, so I’m not sure what their streaming catalog will have to offer.

Reed Hastings’ letter to Netflix subscribers makes clear that (as of right now), there won’t be an additional price increase, although users will now see separate transactions for Qwikster and Netflix if they continue to subscribe to both services. And users will soon be directed to two separate websites, divorcing streaming and DVD from each other even further. I’ve been skeptical about Netflix’s streaming video plans for some time, but I think this move only reinforces the idea that digital delivery is not living up to the promises of providing access to any movie, anytime, anywhere (a point that David Poland also makes quite a bit). Instead, unless something else changes, we will have piecemeal access to limited catalogs that change quickly and sometimes unpredictably. And we will probably pay more for them than we expected a couple of years ago.

Update: Via a friend on Facebook, NPR has a fantastic take on Netflix’s condescending treatment of its customers. NPR’s shoe analogy in particular is especially apt. It’s like Netflix suddenly decided “to sell right shoes and left shoes for 12 dollars each where pairs of shoes used to be 20 dollars and thinking that consumers will notice the lower 12-dollar price but not the fact that it buys only one shoe.”

1 Comment

  1. The Chutry Experiment » Further Reflections on Qwikster and Netflix Said,

    September 19, 2011 @ 2:47 pm

    […] today I posted some quick snap judgments on the Netflix announcement that they would be spinning off their DVD-by-mail business from their […]

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