Netflix and Qwikster

Phil McCracken · **Posted:** Tue Sep 20, 2011 4:22 pm

Interesting article about the Netflix and Qwikster split. Was wondering what the board thinks about this Netflix change. I already had to deep six my streaming option because I don't want to pay 18 bucks a month for Netflix and I like the deeper library the DVD's have. Qwikster is a terrible name for anything. I guess there is a guy that arleady has the Qwikster twitter addy but all he does is post about girls and getting high.

http://www.google.com/hostednews/ap/article/ALeqM5jC02SG5CWeG0p44d4yJJIA_1MZ2Q?docId=a3b9be904416489c8bf185ce7c199f3c

Wall Street reviews Netflix's 'Qwikster' DVD split
By CHIP CUTTER, AP Business Writer – 1 hour ago
NEW YORK (AP) — Netflix's new double-feature is getting bad reviews on Wall Street.

Financial analysts and money managers who own the company's stock are joining the chorus of consumers who are savaging Netflix's decision to separate its streaming video service from its DVD-by-mail division.

Market-watchers say the split could cause more subscribers to drop the service. Netflix will rename its DVD-by-mail operation Qwikster, a brand name that's both hard to pronounce and unknown to consumers. It will also expand into video game rentals. The streaming service will still be called Netflix.

But the 12 million Netflix customers who get both streaming videos and DVDs in Netflix's signature red envelopes will now have to visit two websites to make video requests and check their bills. That outraged subscribers, who filled Netflix's blog with more than 23,000 comments, many of them negative.

Netflix Inc. stock fell $13.72, or 9.5 percent, to close at $130.03 Tuesday. It is now down 55 percent since July 12, when the company announced that it was effectively raising prices by as much as 60 percent for customers who want to receive DVDs in the mail and watch videos online. The Standard & Poor's 500 index has fallen 8 percent in the same period.

With a nod to the terse movie-critic blurbs we all know and love, here's a collection of quotes from financial experts who are watching the stock:

___

"Netflix's recent price changes, followed by the separation and rebranding of the DVD business, have increased (subscriber turnover) and damaged the brand value..."

"...we expect near-term uncertainty to persist until the direction of content negotiations and competitive offerings becomes clearer."

-Andy Hargreaves, an analyst at Pacific Crest Securities.

___

"We see little reason to create a new brand unless Netflix was intending to ultimately spin-out the Qwikster business."

"The friction of using both services could cause more to downgrade or even cancel their service."

-Justin T. Patterson, an analyst at Morgan Keegan

___

"(For investors), we continue to recommend staying on the sidelines until the near-term uncertainties lessen."

"Our concerns ... remain in place and we believe (subscribers) will continue to seek out a less-expensive option in general and especially within an economic environment where fixed costs are being cut by household budgets."

-Eric Wold, an analyst at Merriman Capital

___

"We also have a problem with (Netflix's) decision to enter the videogame rental business. ... The beauty of filmed entertainment, as we see it, is that it is a long-lived asset exploitable in multiple windows."

"Audiences of the series 'Seinfeld,' for example, can still find virtually the same entertainment value in watching that show today versus its prime almost 20 years ago. The same cannot be said for video games, which find obsolescence very quickly."

-David Miller, an analyst at Caris & Co.

___

"I consider this a growing pain, quite frankly. I think they will take some hard lessons away from this — mainly the value of a good PR firm. ... As a consumer discretionary company, this is very attractive at these price levels. ... This is becoming a value stock."

-Jeanie Wyatt, chief investment officer of South Texas Money Management, which owns Netflix stock in its separately managed accounts.

sjboyd0137 · **Posted:** Tue Sep 20, 2011 4:23 pm

I kept the streaming and dropped the DVD service. If the quality doesn't improve, I'm dropping the streaming too.

Krazy Ivan · **Posted:** Tue Sep 20, 2011 4:28 pm

I'm still using both. We'll see how this game rental thing goes. That's not going to be extra, is it?

sjboyd0137 · **Posted:** Tue Sep 20, 2011 4:28 pm

I'm assuming it will be, much like the blu ray option.

Phil McCracken · **Posted:** Tue Sep 20, 2011 4:29 pm

sjboyd0137 wrote:

I'm assuming it will be, much like the blu ray option.

Yeah I have to imagine they will upcharge for it

Terry's Peeps · **Posted:** Tue Sep 20, 2011 4:29 pm

Phil hates Ugie.
http://score670.com/phpBB/viewtopic.php?f=47&t=62411

I kept the streaming. Good when out and Speeps Jr is being fussy. Phineas and Ferb soothes he savage Speeps.

Krazy Ivan · **Posted:** Tue Sep 20, 2011 4:30 pm

sjboyd0137 wrote:

I'm assuming it will be, much like the blu ray option.

If they do that, I'll probably end up dropping it and just download movies I want to see. I thought they were just going to add the game service to the already existing DVD service. That would probably go a long way in pissing off less people...

Phil McCracken · **Posted:** Tue Sep 20, 2011 4:31 pm

Terry's Peeps wrote:

Phil hates Ugie.
http://score670.com/phpBB/viewtopic.php?f=47&t=62411

I kept the streaming. Good when out and Speeps Jr is being fussy. Phineas and Ferb soothes he savage Speeps.

I looked in the movies section....but apparently didn't search the board good enough. If only the search function worked.

chaspoppcap · **Posted:** Tue Sep 20, 2011 4:37 pm

I am keeping both.Lots of stuff you can't get streaming.

sjboyd0137 · **Posted:** Tue Sep 20, 2011 5:45 pm

Krazy Ivan wrote:

sjboyd0137 wrote:

I'm assuming it will be, much like the blu ray option.

If they do that, I'll probably end up dropping it and just download movies I want to see. I thought they were just going to add the game service to the already existing DVD service. That would probably go a long way in pissing off less people...

Honestly, I don't think they have a choice other than nickel and diming everything possible. It looks like they may have to pay through the nose for the rights to show movies, and we know where that money is going to come from.

http://insidemovies.ew.com/2011/09/01/n ... streaming/

Quote:

Starz’ asking price could have been a sticking point, too. Last year, Netflix struck a deal with the premium network Epix and gained the streaming rights to movies from Paramount, Lionsgate, and MGM. That agreement was estimated to cost Netflix $1 billion over the course of five years. As a result, it’s likely that Starz was asking for at least $200 million per year from Netflix, compared to the estimated $30 million per year the network currently receives.

shirtless driver · **Posted:** Tue Sep 20, 2011 5:55 pm

sjboyd0137 wrote:

I kept the streaming and dropped the DVD service. If the quality doesn't improve, I'm dropping the streaming too.

That's what we did too> I haven't really had any problems with the streaming quality, and my wife just told me yesterday that the RedBox at
our Piggly Wiggly now has Blu-rays for $1.50. We've got so many dvd/blurays we've never even watched, and hours of TV on the DVR, it made no sense
to keep the Netflix dvd by mail part, but I love the streaming side of it.

Mr. Hernandez · **Posted:** Tue Sep 20, 2011 6:14 pm

i kept the streaming. I can always go to a redbox for newer movies they wont have on stream

spmack · **Posted:** Tue Sep 20, 2011 7:03 pm

Mr. Hernandez wrote:

i kept the streaming. I can always go to a redbox for newer movies they wont have on stream

Same here.

jimmypasta · **Posted:** Tue Sep 20, 2011 7:08 pm

Just canceled NETFLIX (streaming only) and Hulu Plus. Main reason was streaming issues and I basically never used it. I Do have Amazon Prime which I have never had one streaming issue. Amazon Prime was a free add-on for getting free shipping on Amazon products for one year. I didn't even know about it. I think it just started this year in January. For 70 (or was it 80?) bucks for 12 months,I thought it was a pretty good deal.

Big Chicagoan · **Posted:** Tue Sep 20, 2011 7:10 pm

Netflix is making the move to get rid of DVD's all together. They realize that it is dying technology. Look for them to greatly increase their streaming library in the future and completely neglect Qwikster.

Brick · **Posted:** Wed Sep 21, 2011 4:05 pm

How dare Netflix try and stay in business!

When your distribution costs raise as drastically as they are you have to raise your prices. Netflix did it by splitting apart and letting the dvd rental service slowly fade away separately.

Blame the studios for this. You knew they couldn't allow an affordable way to not steal their content to last forever.

Ugueth Will Shiv You · **Posted:** Wed Sep 21, 2011 4:11 pm

The studios certainly are to blame; BRick is right. Welcome back, by the way.

As Paul Quintaro states in a recent article from Seeking Alpha, another possibility pertaining to the business split (which customers will now need to access and manage their accounts from two separate websites) is that NetFlix is hoping Qwikster is bought out by another entity.

Quintaro wrote:

Last month, Starz broke off contract negotiations with Netflix. Despite the fact that Netflix purportedly offered Starz a new contract ten-times the size of its previous one, Starz refused to accept a deal.

The ideal end game for Netflix is to offer a service that can stream all movies at all times. Right now, Netflix is far from this goal, with a catalog primarily composed of older movies and television shows. The loss of the deal with Starz will only further reduce Netflix’s offerings.

To accomplish that goal, Netflix will presumably have to secure more content contracts. If it cannot even extend its deal with Starz, how can it be expected to secure broader deals with larger content providers?

Phil McCracken · **Posted:** Wed Sep 21, 2011 4:13 pm

Ugueth Will Shiv You wrote:

The studios certainly are to blame; BRick is right. Welcome back, by the way.

As Paul Quintaro states in a recent article from Seeking Alpha, another possibility pertaining to the business split (which customers will now need to access and manage their accounts from two separate websites) is that NetFlix is hoping Qwikster is bought out by another entity.

Quintaro wrote:

Last month, Starz broke off contract negotiations with Netflix. Despite the fact that Netflix purportedly offered Starz a new contract ten-times the size of its previous one, Starz refused to accept a deal.

The ideal end game for Netflix is to offer a service that can stream all movies at all times. Right now, Netflix is far from this goal, with a catalog primarily composed of older movies and television shows. The loss of the deal with Starz will only further reduce Netflix’s offerings.

To accomplish that goal, Netflix will presumably have to secure more content contracts. If it cannot even extend its deal with Starz, how can it be expected to secure broader deals with larger content providers?

They are definately going to try to spin off the Qwikster business. Costs less to just maintain an online video library....rights fees nonwithstanding than to deal with the muss and fuss of actually mailing out physical media. Plus obviously the area with the opportunity for more upside and long term expansion is the Video on Demand stuff.

Zippy-The-Pinhead · **Posted:** Wed Sep 21, 2011 4:18 pm

Boilermaker Rick wrote:

How dare Netflix try and stay in business!

When your distribution costs raise as drastically as they are you have to raise your prices. Netflix did it by splitting apart and letting the dvd rental service slowly fade away separately.

Blame the studios for this. You knew they couldn't allow an affordable way to not steal their content to last forever.

The way they went about the change was clearly bad from a customer relations standpoint and potentially bad from a business one. Simply raising their rate couple of bucks wouldn't have raised an eyebrow.

Swingandalongonetoright · **Posted:** Fri Sep 23, 2011 10:51 am

Picked up a few shares the other day. Even though it was overvalued when it hovered around $300/share, Netflix isn't going anywhere anytime soon.

crosscheck · **Posted:** Fri Sep 23, 2011 3:05 pm

At least most of the James Bond films returned to the stream... Don't know how long its gonna last though so you better get while the getting's good...

And they need to fix the presentation, the only good way to find out all the movies they have is by searching actors...

Krazy Ivan · **Posted:** Fri Sep 23, 2011 3:08 pm

crosscheck wrote:

At least most of the James Bond films returned to the stream... Don't know how long its gonna last though so you better get while the getting's good...

December. I'm trying to rush through them all soon...

sjboyd0137 · **Posted:** Fri Sep 23, 2011 3:50 pm

crosscheck wrote:

And they need to fix the presentation, the only good way to find out all the movies they have is by searching actors...

This

Jaw Breaker · **Posted:** Fri Sep 23, 2011 4:30 pm

Agree they will try to dump Quikster, but that is the one thing where they have an infrastructure advantage. I would imagine Google, Apple, Amazon, Comcast, etc. would have little trouble duplicating Netflix's streaming service if desired. Seems the business will go where the studios want it to.

sjboyd0137 · **Posted:** Fri Sep 23, 2011 5:26 pm

Jaw Breaker wrote:

Agree they will try to dump Quikster, but that is the one thing where they have an infrastructure advantage. I would imagine Google, Apple, Amazon, Comcast, etc. would have little trouble duplicating Netflix's streaming service if desired. Seems the business will go where the studios want it to.

Comcast is literally missing the apps to run through gaming systems, otherwise, they have the streaming service through xFinity.

Zippy-The-Pinhead · **Posted:** Sat Sep 24, 2011 4:27 pm

So I am trying to see what might be interesting to my daughter on Netflix instant download and type in Star Wars...the similar suggestions comes up with "Our Town" & "Some Like It Hot".

shakes · **Posted:** Tue Oct 11, 2011 8:52 pm

Qwickster lasted 23 days. It was pulled today. Netflix stock has dropped 7%. These guys can't stop fucking themselves.

Big Chicagoan · **Posted:** Wed Oct 12, 2011 8:15 am

shakes wrote:

Qwickster lasted 23 days. It was pulled today. Netflix stock has dropped 7%. These guys can't stop fucking themselves.

Yeah. The CEO needs to be replaced immediately. He fucked up the company royally now.

shakes · **Posted:** Wed Oct 12, 2011 5:29 pm

Big Chicagoan wrote:

shakes wrote:

Qwickster lasted 23 days. It was pulled today. Netflix stock has dropped 7%. These guys can't stop fucking themselves.

Yeah. The CEO needs to be replaced immediately. He fucked up the company royally now.

The CEO said that he had all the major investors at his house for the weekend and he felt like he needed a foot taster to make sure he wasn't poisoned...and that he didn't blame them if they did make an attempt on his life.

Krazy Ivan · **Posted:** Thu Oct 13, 2011 12:08 pm

shakes wrote:

...he felt like he needed a foot taster...

Netflix and Qwikster

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