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Is Netflix Doomed? - Page 4

post #91 of 103

The whole shot themselves in the foot with a price increase combined with a company split .. ?? As they say, any publicity is good publicity .. and when you roll out this kind of news, it's best to just get it over and done with as quickly as possible .. which they have done .. now, if NF would just anounce some major content deal, most of the haters would fade quick ..

Anyway it is spun, this pub has been a disaster for Netflix.

You're right that a major studio announcement would help but are we really going to get it? Why not wait to hike prices until Netflix can announce a studio addition?

Netflix doubling my rates with zero additions (and losing Starz which I watched) and doing so IMO with an atrocious attitude tipped me over and I cancelled
post #92 of 103
My family and I was big fan of netflix rental for years. Now they gone crappy with the streaming as their main market. Only crappy movies on streaming anyway with ****** quality even if it's HD. Well they also raise the prize so we call the cancel. They didnt even ask me why i cancel, the process took like 5 minutes tops. guinness world record for the easiest cancellation and fast too. RED BOX is the way to go. It's everywhere and convenient.
post #93 of 103
Red Box does not deliver direct to my mailbox. I have to go out and seek Red Box.

I did not think the streaming was bad at all, right around DVD quality. Of course, I have FiOS 35/35, so I could stream at max Netflix bandwidth without any worries. I did not do it enough to warrant paying double to keep it, so I canceled that portion and only kept the direct to home portion - for the BluRays.
post #94 of 103
I just signed up for Netflix a few weeks ago and I love the streaming on the TV/Blu-Ray player side. The quality of the streaming that I get to my HDTVs is pretty damn stunning (I have it set on the highest quality) and superior to my HD cable feed so I'm pretty happy with it. The PC streaming on the other hand, is a God damned disaster, and looks pretty bad compared to what comes through the TV. I hope they improve that in the near future because it would be nice to watch shows and movies that don't look like 240p YouTube rips.
post #95 of 103
Originally Posted by kapone View Post

p.s. And I put my money where my mouth is. When the news about the Starz deal broke, I immediately turned around and shorted Netflix at whatever they were trading at. Turns out it was $263 and change. I could pay for 100 years of Netflix subscriptions with what the stock's trading at right now. And I still haven't covered.

I know I'm quoting myself, but... The stock dropped 12% today....which made a perfect covering opportunity. Covered at $111 (shorted at $263), and.....went long at $111. It should see a good 10% upside in the next few days.

p.s. This is not stock advice, please don't take it.
post #96 of 103
Thread Starter 
SAN FRANCISCO (MarketWatch) — It’s now almost two weeks since Netflix Chief Executive Reed Hastings sent out his hollow apology to customers, which included news of the stunning decision to separate its streaming and DVD businesses, and the brouhaha has quieted down.

Netflix CEO Reed Hastings in Buenos Aires on Sept. 7. The company remains under a cloud since announcing the split of its streaming and DVD businesses.
Except that the notion lingers that the company has made a fateful move with the split, which has so far slashed about 40% from the firm’s market value over the last couple of weeks alone.

Nearly every step Netflix Inc. has made along the way to stay ahead of the technological curve seems fraught with mistakes that have infuriated customers, to the point that Netflix had to cut back its subscriber forecast for the September quarter by 1 million. Its price hike may not even be irritating customers as much as the thought that if they keep both services, they will need to manage separate movie queues and set up different payment schemes. Read more about Netflix separating streaming business and DVDs with Qwikster.

Some believe even that the naming of the two businesses was mismanaged — to the point of picking the goofy and ill-fitting name Qwikster as the new brand of the slower, DVD-by-mail business.

“It is so bush league, so juvenile, so immature it feels intentional,” said William Lozito, chief branding officer of Strategic Name Development, a naming company in Minneapolis.

Another odd aspect that quickly came to light was the fact Netflix had not procured a Twitter account for its new name. Instead, the holder of the Twitter handle @Qwikster is a sometimes foul-mouthed man whose name appears to be Jason Castillo. A search for Qwikster on Twitter shows other related names, including @Qwikster Tweets and @Qwikster Rentals. But it’s not clear which Twitter account, if any, is being used by Netflix for its Qwikster business. A Netflix spokesman said that these questions will be answered when the company launches the new brand.

Click to Play Blockbuster still goes after Netflix Dish is expected to introduce a Blockbuster streaming-video service that could potentially compete with Netflix. Rex Crum reports.

In this era of social media, securing a Twitter name has become a key part of the branding process, Lozito noted, just like securing a URL and a Facebook page.

“It’s almost as if they were creating a video that is a spoof on how to change your company name,” said Lozito. “It should be something that ends up on YouTube that everyone gets a chuckle.”

So is Netflix purposely setting up its Qwikster business for failure? Recent comments by the company’s chief financial officer at a Goldman Sachs investment conference suggest that is not the case. He noted that another motive behind the separation move was to give the DVD-by-mail business more freedom and resources to market itself.

“It was increasingly difficult for those people who had built this great DVD service over the last five years to get resources, to be noticed and talked about and excited, attracting and retaining talent became harder,” Netflix CFO David Wells said last week.

Shares of Netflix, though, show investor frustration with the company’s subscriber losses, customer churn and at how poorly the company seems to be telling the story and explaining its rationale behind the moves, which appear to be motivated by the rising costs for streaming content from Hollywood studios, as well as the more competitive environment.

Since Netflix first announced its plans of its price hike on July 12, its shares have plummeted around 56%, after briefly nearing a peak of $300. On Wednesday, Netflix shares closed at $127.14.

In a recent analysis, Credit Suisse wrote that its expects the company’s streaming business to be the high-growth unit, while Qwikster will represent a higher-margin, but declining business.

“Over time, we expect streaming profits to increase rapidly,” driven by higher subscribers and higher international profits, wrote Credit Suisse analyst John Blackledge. He predicts the company’s U.S. streaming-only revenue will total about $2.5 billion in 2012, growing at a compounded rate of 19% to 2016 and international streaming will hit $251 million in 2012.

Qwikster, he forecasts, will end 2012 with about $1.8 billion in revenue, declining annually by 2% though 2016.

With the streaming business retaining the Netflix name, the company is hitching its future to streaming. Now some are wondering whether Netflix’s actions really mean it wants the DVD business to die a quick death, rather than the prolonged decline that some investors expect.

Therese Poletti is a senior columnist for MarketWatch in San Francisco.
post #97 of 103
Nice way to implode a business!
post #98 of 103
If they can make Qwikster a great service over the next 6 months people will forget all about this. They need good new content ASAP.
post #99 of 103
Nope. Netflix is going to get acquired. No one wants that dvd-by-mail part of the business, so Netflix HAD to split the company into two. They just don't have the $$$$ to stay in the content game. They will get acquired by one of the heavyweights, i.e. Amazon, Apple, Google or Microsoft.

The dvd-by-mail will probably get acquired by somebody like Walmart for peanuts.
post #100 of 103
If you haven't seen yet. The other co-founder and former netflix exec. http://marcrandolph.com/2011/09/26/d...dont-think-so/


When Reed and I launched Netflix in 1998, it was a very different company from the one you know today. The Queue, Unlimited Rentals, and the No-Due-Dates-No-Late-Fees model were still more than a year away. Our rentals were standard a-la-carte rentals. They had due dates. We charged late fees.

Oh . . . we also sold DVDs.

In fact, much to our great concern we sold a lot of DVDs. Bucket loads. So many, that by the end of our first summer, I would guess that 95% of our revenues were coming from the sales of DVDs. Although this did pay some bills, it was obvious to us that this was not a sustainable business. It was inevitable that at some point in the near future we would have Amazon entering the DVD business. And then Walmart. And then just about every mass market retailer in the country. All of which would have crushed our margins and slowly but surely driven us out of business.

Not only that, but even while the going was good, it was hard not to let the tail wag the dog. Despite knowing that the true future of the company was rental, it was hard not to spend time focusing on the area of the business where most of the money was coming from.

Most importantly, by trying to run a business that did two things well, we inevitably were forced to make an endless series of compromises that resulted in us doing neither of them well. Our landing page and sign up flow had to accommodate two different paths. Our checkout process needed to handle two types of transactions. Our shipping process had to accommodate two different types of products (one that had to come back and one that didn't). Our content system had to accommodate titles we could only rent, ones we could only sell, and ones where we could do both.

In hindsight, it seems like such an obvious decision to stop selling and focus on renting. But wow - for a young CEO like myself turning away from the source of 95% of our revenue was just about the hardest thing I had ever done.

Needless to say, it worked. Not only did walking away from 95% of our revenue have a way of focusing the mind on the remainder of our business, but the benefits began showing up everywhere - even in places we never suspected.

By freeing our designers from having to create a sign-up flow that accommodated two types of business, we were able to cut out steps, clarify instructions and simplify the process. Conversion went up.

The only thing I could say is look at Amazon. They seem to be able to handle multiple things at once.

At this time I still use both streaming and DVD. If I get rid of anything at this point it would be streaming. The lack of new content and quality are the reason I don't. I mainly watch TV shows like old Saturday Morning Cartoons and the I.T. Crowd repeatedly.
post #101 of 103
Hollywood controls the product (content) and they clearly want to rent popular and new releases via PPV, not via subscription. They have stated as much. They don't much care how they do it (iTunes, Amazon VOD, XBox/Zune, Vudu, or your Cable box are all fine with them).

They also make a good deal of money on the "exclusive" window that happens some months/weeks after a movie is available via PPV. They'll sell that window to the highest bidder (HBO, Cinemax, Showtime, etc.)

Finally, stuff goes into non-exclusive and syndication mode.

So, Netflix can do the following:
1. Include a PPV service (much like Amazon having both PPV and subscription content) to get new releases.

2. Go after the Exclusive window and fight it out with HBO, Showtime etc. The recent Dreamworks deal is an example of this. No new releases this way but still some good content that's fairly new. However expectations is that Netflix should have everything the do on disk so folks will likely be disappointed when HBO or Showtime get an exclusive.

3. Become a syndication service for older content and just sell themselves as that. It's what their streaming offer currently is for all intents and purposes. But again, high customer expectations from being used to their DVD selection make this a hard sell as well.

I'd suggest they either go with option 1 or find a buyer, perhaps MS will to get in the market and add this to their PPV service. Ultimately without a disc option they need both new release PPV and a subscription service for older content which is what Amazon is doing and has been rumored about Apple for ages.

I currently use Netflix because I can get BD for things that aren't available on streaming or are worth the BD quality for the visuals and streaming for old TV and such where their "HD" offering is good enough. It's having this option that makes Netflix worthwhile for me. Without it, what's the point?
post #102 of 103
For streaming there are two options: subscription or PPV. There are numerious PPV streamers: Vudu, Amazon, Blockbuster etc. Subscription streamers are few: Netflix, Hulu and now Amazon. Of those Netflix by far has the best and widest selection. Recent movie releases will never be available from a subscription service.
post #103 of 103
Never is one hell of a long time, so unless you can see into the future it means nothing.
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