[DevX101]

Netflix should be able to walk and chew gum at the same time. There are a lot of successful companies that are much more diversified than Netflix is right now. This honestly strikes me as a panic driven move in response to the customer rage and their precipitous drop off in stock prices.

I'm trying hard but can't see the upside to this move. And I think this will cause a big hemmorhaging in profit for the short/medium term. Netflix has 12 million members that are on both the DVD and the streaming plan. These are the folks that got the 60% price hike. Although Netflix lost some customers (~5%) after the pricing change, that massive price hike put them in a position to increase profits, even with less members..

But now that Netflix is splitting itself in two, I can guarantee you a sizeable chunk of people who were just happy with the dual plan will end up picking one or the other.

That being said, I like that they're tackling video games. They ought to take a serious look at getting into competition with Steam, which is making $1Billion in revenue and growing, with high profit margins.

[sriramk]

If you think something of this scale was put together in a month, you don't understand how large companies work. This has to be in the works for atleast 4-5 months. The press likes to construct these action->reaction narratives (Foo launches Bar in response to company X doing Y yesterday) but in reality, these things take time and are rarely direct responses to events.

[silverbax88]

Yes, it's obviously been in the works for some time now. But the other problem with big companies is that once they start heading in a direction, it's almost impossible to stop, even if it's clearly the wrong direction.

[powertower]

IMO, it's was more like 4-5 years.

DVDs-by-mail is a business with a very specific half-life. Was started in 1999, peaked in 20xx, will end in 10 years.

http://www.devside.net/blog/netflix-sinister-plot-called-qwi...

[0x12]

> I can guarantee you a sizeable chunk of people who were just happy with the dual plan will end up picking one or the other.

But the upside for netflix is those people that end up picking both.

The time to analyze this is 6 months from now when the figures are in.

My personal best guess about what they're about to do is sell off the DVD division.

[jonknee]

> But the upside for netflix is those people that end up picking both.

How's that an upside considering that's what they currently have? Instead of one charge on your credit card there will be two that add up to the same thing. At best (for Netflix). This will not raise revenues.

[phamilton]

Picking both results in a 40% price hike. I think the OP was referring to the whole situation, not just the name change.

[18pfsmt]

I think it's important to realize the difference between these businesses. Qwikster won't have to negotiate with the content providers because they can purchase the DVDs and games and rent them without the content companies having a say. Netflix has to negotiate for all their content, and we all know how reasonable the content companies are.

I don't think we'll see a spin-off for at least a year, and probably bit longer.

[fluidcruft]

I think you're right. As not much more than a Netflix subscriber, it really, really looks like Netflix is desperate for cash. Maybe they're getting ready for war (i.e. they may well know that Amazon or Apple or Google could well be imminently about to crush them). I know we've already switched to Netflix streaming+1DVD-plan+Amazon-Digital-Downloads (not streaming) but we've been using redbox so much now for new releases that the 1DVD plan is feeling quite expendable.

[Hostile]

Steam doesn't rent games, which is what I believe qwikster intends to do. It's gamefly they would be competing with. If I were gamefly, I'd be very worried right now.

[BenSS]

Steam has massive discounts on games quite frequently, so it will often be cheaper to buy as long as it's not a super-recent release.

[r00fus]

Steam works on consoles? this was news to me. IIRC, it looks like Qwikster's gaming strategy is more focused on consoles than PC.

[brown9-2]

If people haven't left when the prices went up, do you really think a name change and two sites will be the final straw?

[GnomeChomsky]

Yes. You have a segment -- and we'll shortly see how large it is -- that were OK with higher prices because of convenience. Reduce the convenience, and you've made it harder for certain, but not all, folks to justify the cost for themselves.

[vijayr]

May be they could've locked the old price for existing customers (or given a steep discount on the new price), and only apply the increased price for new customers? That could stop the hemorrhage in the short/medium term.