It's been an interesting few months for Netflix. In mid-summer, the company announced price hikes that would separate its DVD and streaming services, upping the cost of accessing both options from $9.99 per month to $15.98 per month. That was followed by an apology from CEO Reed Hastings for the abrupt manner in which the price changes were announced, but he then went on to announce another major overhaul. Netflix would split its DVD and streaming services into two businesses - Netflix for streaming and Qwikster for DVD rentals.
Not surprisingly, the changes did not sit well with users, and in a rather terse announcement on Monday, Hastings said Netflix would ditch the whole Qwikster thing and just carry on as usual. With so much back and forth, the Netflix drama has certaintly prompted some confusion; we break down what will and won't happen to your accounts going forward.
What were people so worked up about?
In addition to the price hikes, the decision to split Netflix into two businesses meant that you would also have to manage two accounts. Instead of just adding movies to a queue and managing DVDs and streaming options via Netflix.com, everything related to DVDs (including billing and queues) would be handled on Qwikster.com.
But Netflix came to its senses?
Fear not, you will not have to memorize another password for Qwikster.com or manage a separate queue for DVD rentals. "This means no change: one website, one account, one password… in other words, no Qwikster," Hastings wrote in a blog post yesterday.
Will my account change in any way?
At this point, the price hikes that went into effect on September 1 are the only changes that will remain in effect. Otherwise, you can manage your account and access streaming video via Netflix.com, as usual.
What are those pricing options again?
Unlimited access to Netflix's Watch Instantly service will set you back $7.99 per month. To add unlimited DVD rentals, it is $7.99 per month for one DVD out at a time, $11.99 per month for two DVDs and so on, all the way up to 8 DVDs out at a time for $43.99 per month.
What about video game rentals?
As part of the Qwikster announcement, Netflix said it would add the option to rent video games via the new company. Netflix told the New York Times that the fate of that video game option was still in limbo and is "to be determined."
Why would someone want to wait for a DVD instead of streaming?
There might be some people who enjoy finding that red envelope in their mailbox, but most users are sticking with DVDs by mail because the selection on Watch Instantly is still a work in progress. Netflix has made several lucrative deals in recent weeks, including those with DreamWorks and AMC Networks, but it also lost its deal with Starz and still has some work to do when it comes to getting new releases. Bottom line: if Watch Instantly had all the options that were available via DVD, most would probably switch to streaming. Until then, the red envelopes continue.
Why on Earth did Netflix think Qwikster was a good idea?
In explaining the switch, Hastings said "streaming and DVD by mail are becoming two quite different businesses" that have different needs, so it made sense to separate them. There was also speculation that Netflix spun off its DVD business into Qwikster so it could be sold, but no deals have been announced. It seems, however, that Netflix didn't give much thought to its customers, who clearly didn't care what made sense from a business perspective.
So all that drama over the @Qwikster Twitter feed was for nothing?
Basically. In the wake of the Qwikster announcement, it was revealed that Netflix did not own the rights to the @Qwikster Twitter feed. That was being used by someone named Jason Castillo, who communicated in several grammatically challenged tweets that he would only give up the rights to the feed for big bucks. Netflix ignored the demands and later settled on @QwiksterTweet, an account that has since been deleted.
What about Qwikster.com?
The site currently re-directs to Netflix.com.
Can Netflix recover from the bad press?
The price changes alone were enough to possibly result in the loss of one million customers, according to projections. Netflix's stock has also had a bit of a wild ride in the past month. The company will report its third quarter financial results on October 24, so expect more details at that point. In terms of customer complaints, many were annoyed that Netflix did not seem to appreciate customer loyalty and failed to offer discounted pricing for those who subscribed to DVD rentals and streaming, among other things. For more, see Is Netflix Doomed?
Is Netflix done with the changes?
Your guess is as good as ours when it comes to new business schemes, but Hastings said in his blog post that "we are now done with price changes."
If I don't do Netflix, what are my options?
Amazon has its Instant Video service, and there's also Redbox, as well as downloads from Apple's iTunes. Hulu offers recent TV episodes for free and full seasons via the subscription-based Hulu Plus. Walmart has streaming movies via its Vudu service. Blockbuster has also said it is readying a Watch Instantly-esque streaming service that will launch in the near future.
For more, see Change Or Die: Netflix and the Future of Home Video and Netflix: "It's Not You, It's Me."