[yequalsx]

I can't see how this is a good decision. Their streaming service is cheap but lacks titles. I use DVDs to get the shows and movies I can't get from the streaming service.

Obviously streaming is the future but the DVD part generates profits. The streaming only service - if it truly stands alone - is soon going to be competing with Amazon, Google, and Apple but without as much cash as these companies.

With their stock's price drop maybe Google or Apple will be willing to buy them. I don't see them surviving on their own without being bought out.

[nosequel]

Most successful business don't make huge decisions like this if there wasn't a reason. And instead of speculation, we know why this split is happening. Think back with "The Social Network" was pulled from Netflix. The reason was that Netflix and Stars in their contract was limited to a certain number of viewers. In Stars' eyes, Netflix's total userbase was the number of viewers even though Stars was only concerned with streaming. So, to appease both the DVD licensing where they pay the studios per rental (and streaming shouldn't count against that) and to appease streaming licensing where they also pay by the size of the viewership (such as the case of Stars), they had no choice but to not only split the subscription model, but the company itself.

Thinking that Netflix would kill a good thing is pretty dumb and I sort of expected more from the HN audience in this case. Netflix is doing what they have to do, not what they want to do.

[yequalsx]

Your last paragraph seems to suggest that companies don't make dumb decisions by "killing a good thing". Maybe you think only Netflix doesn't make dumb decisions of this sort but there is a long history of companies making dumb decisions by killing 'a good thing'.

As stated I don't see how Netflix will survive long term.

[nosequel]

Companies in the past have definitely made dumb decisions you are right about that, but typically they don't just kill off their main cash cow for no apparent reason. That's all I'm saying. All of the "why would he do this?!?" posts are dumb for thinking that someone like the CEO of Netflix doesn't know that this would be a pretty stupid split of the business if he didn't have to do it to survive.

[iand]

Good analysis

[waterlesscloud]

Awful, awful decision. I have no intention whatsoever of maintaining 2 accounts, one for streaming and one for dvds. I'm straight out lost revenue.

[male_salmon]

Just out of curiosity, why would maintaining two accounts be so painful? If that were so, wouldn't it be equally painful to maintain different social network accounts (assuming you have two or more).

[yequalsx]

Netflix is the one recurring bill on my credit card. I like the company and think it has great customer service. I trust the company. I don't want multiple recurring charges on my credit card. The more paid accounts a person has the more likely it is that an account will be forgotten about.

Also, it would be a pain to find out a movie isn't available for streaming and then having to login to another account to put the movie in its cue. And I don't want to browse DVDs and put one in my queue when it's available for streaming.

[foobarbazoo]

I did trust the company. That's gone now. All that time we've spent rating stuff? Spun off to this POS Kwikster company, and no longer integrated.

It's rare that companies this size make such stupid moves; this is one of those times.

[afarrell]

But its not a new company. Its the same organization headed by the same person with the same employees as before. There is just some different branding.

[jonknee]

The new branding includes a CEO and it's being billed separately. Not to mention being completely separated online (no shared ratings or searching). It's a different company.

[waterlesscloud]

Billing will be separate, which is a minor annoyance, but an annoyance nonetheless.

The bigger issue is splitting my ratings and thus my suggestions. I already ignore other places to rate movies since only netflix provided a tangible benefit to me. Split it, and it won't.

[male_salmon]

With billing, most of us already maintain different accounts with different e-commerce sites. One more is not that bad. Ratings on either Qwikster or Netflix will benefit you because of the improved recommendations. Yes, it's a shame they won't be integrated, but overall the split will benefit the company and its customers.

[tlianza]

Everyone on this thread knows that there is no technical reason to split the ratings. It's implausible that a company of this size couldn't break that subsystem into a shared service.

The reason for the split has to be business-related, and my best bet is to create a very clean separation of intellectual property. This among other things is why I find the post disingenuous.

[toyg]

Yeah, to me this looks like a way to isolate the profit-making but old-school DVD business from the disruptive but fragile streaming platform. Studios are squeezing streaming providers for royalties at the moment, and sooner or later either the small players will fold, or streaming will fully replace dvds; by splitting services, Reed is trying to maximize its chances of maintaining at least one solid business. Still, the right thing to do would be to maintain technical integration between the two, maybe spinning off the analytics / suggestions as a third company providing services to both for a nominal fee.

[foobarbazoo]

Do you work for Netflix? On what planet does any of this make sense for customers.

Hastings is the very definition of stupid: hurting himself, his company, and his customers -- all at the same time, and totally oblivious to it all.

His method to "fix" his previous mistake is to make an even bigger one. Unbelievable.