What Netflix Could Have Said This Week
appleoutsider.com
appleoutsider.com
Regardless of media, business structure, delivery mechanism, company name, etc. methinks what all customers want is a single place to choose & queue content, filtered by whatever options they desire, delivered on whatever medium is available and they pay for via a spectrum of contracts (from unlimited-per-month to single order).
Just make sure it's all on one queue. If multi-queue, then only because one customer may be grouping for multiple individuals (ex.: husband wants ultraviolent scifi, wife wants sappy romances, kids want Elmo galore). Whatever you do, don't force the customer to spend time/effort along such artificial differences as media (ex.: I want the DVD of "Scarface", but it's not on streaming anymore and I don't want to pay extra for the BD version - let me pick those options based on my single content choice, don't make me search 2-3 different sites for the same title which, I notice, have unreliable availability).
Amazon faces the same issue: vast business differences between warehouses of books & other physical stuff shipped by mail, vs. server farms for Kindle, streaming video, cloud storage/processing, etc. - same problem as Netflix, yet they're doing well under one website. I can search for Moby's latest album, and when ready to order can with ease choose between CD, MP3, DVD, and instant video: same content pool, same checkout, easy delivery, user doesn't care how it all happened.
I'm quite interested to see how they handle user data in the split -- will each company get a copy? Will the Netflix side maintain a complete database of movies, even if it can't stream them, so that you can continue to rate freely and get recommendations?
There are some thorny user experience problems here for sure, but they are not unsolvable.
the issue is that Netflix thus far has done zero to try to make them better and has, ever step of the way, created these issues when a simple, customer friendly workaround seems apparent.
what to do about ratings? make the two sites interoperable. hell, create an API for Netflix ratings.
what to do about the two Queues? i already have two Queues on Netflix. make the two sites interoperable. seems pretty basic for a big league company.
whatever. i am not shedding any tears. I've been watching movies online for almost 10 years now and I'm going to continue doing so. whether i pay netflix money or fire up a BT client, i don't really care.
the real question is: does Hollywood want my money?
I'm worried that the studios are like the barbarians at the gates of the Roman/Netflix empire, and that the dark ages and feudalism are looming. Hopefully we won't have years of crappy legit setup vs. a much better illegal option before another unifier like Netflix rises.
Further to what I assume is your point, we have a few years of practice in linking accounts, so a particular user's historical data can easily be integrated with this new corporate architecture.
EDIT: I'm using the royal "we" to refer to technological techniques for linking accounts across disparate websites. I don't work for Netflix.
No way in hell they'd weaken, much less throw away, their golden goose.
Netflix has to go back to providing a better service at an affordable price, something that isn't as easy as it once was when you're going against other streamlined big name contenders like Apple, Amazon or Hulu vs the old "incompetent" competition that was basically Blockbuster & Hollywood Video.
As of today there stock is down 40% from when this whole debacle started.
Sometimes you have to do something that customers might not "want" to get to something that they really do want. If this lets Netflix improve their streaming service without being bogged down by dvds then I'll be all for the change.
I think the end goal of this move is to kill off or sell the DVD portion of the service entirely, so by splitting the services, investors won't freak out when that eventually happens. This also is another reason for splitting the queues.
Huh, maybe I'll check Amazon, where I can buy "Scarface" new, buy it used, no-strings streaming rental, or maybe even Prime "free" streaming...and all from a single search...[clickety clickety]...ah, it's $3 to stream it once, and there's 53 purchasing/renting options from $0.01+shipping used VHS to $3 streaming rental to $700 including humidor. Pity it's not in the "free Prime streaming" option, but at least I know the options with one search.
Netflix, thanks for doing this to your customers.
But I suspect you're right about killing off or selling the DVD service, and I think they're intentionally trying to sour customer opinion to bring about this end. It's a shame, because Netflix, as it previously existed, was one of the few subscription services I was happy to pay for. After the site redesign, everything's gone to hell (instantwatcher.com is the only useable interface I've found, on any platform). Oh, well, it was good while it lasted...
So now, they'll find... it's not available at all. How does that any better for customer morale?
Admittedly, the much bigger motive is that they want to get rid of their dvd-by-mail business.
Currently, if I come across anything I'd like to see at some point in the future, I add it to my Netflix queue and forget about it. I may watch it via streaming if and when available, or get it on DVD, or buy it...it doesn't really matter. The queue itself has value because it's a one stop shop for anything I may want to see (well, aside from things currently showing on television, which get added to Tivo in similar fashion).
Splitting the queues kills that convenience. Now I'll have to add it to multiple queues on different sites, and think about which list(s) something needs to be on, and maybe keep things in sync...it takes Netflix's single best feature to me and just kills it.
But ratings are another matter. Seems like they could syndicate that data back and forth.
On my Blu-Ray player, the queue is the only way to play anything.
If they feel the true future of their product is in streaming than I think this makes sense. They aren't trying to hold onto the low-margin DVD my mail people. They are trying to encourage more streaming customers and move forward in a drastic way.
Maybe the better way to accomplish this is to make the netflix classic website as discussed in the article include the non-streaming movies and just have people with instant queue not even see other movies.
Regardless- I don't think one queue is necessarily better.
Services like goodfil.ms (http://goodfil.ms.) and GetGlue (http://getglue.com) are good at helping people discover and find films within their own networks.
Eventually streaming of films will become a commodity; Netflix, Apple, Hulu and the cable networks will all vie for market leadership of streaming; and IMHO whoever creates the best social queue is where the long term value is.
Facebook are clearly going to make a play at this with their Watch button - it'll be interesting to see how exactly, but it's not difficult to imagine them serving up "8 of your friends have watched Scarface" in place of their ads - then directing you through to Netflix for viewing.
People are annoyed that their ratings/suggestions won't carry over to the new site, and that the streaming-site won't let them add a movie to their DVD-by-mail queue when they search for a title and find it's not available on streaming (or vice versa, the DVD-by-mail site won't tell them when they could be watching a title via streaming).
You have to fix that to fix the customer response.
I think netflix is actually in deep trouble. It's lost Starz, and could be losing other valuable rights, it's changing its business model in a way tha damages its own stickiness, and it raised its prices in a recession for reasons that make no sense to customers.
I remember getting an email from them years ago that said in essence, "We've upgraded our systems and are now more efficient. because of this your plan will be reduced by xyz." Better service and cheaper, i thought they had me for life...until recently.
Yeah, that was me a week ago. Now, I just dread explaining to my other half that we will need to manage two movie queues.
Maybe even allow non-paying members to sign up just to rate and suggest films, and constantly entice viewers with a "watch now with a Netflix subscription!" logo in the corner.
They could easily try to take share from IMDB and Rotten Tomatoes, and be "the website for movies". Every time someone makes a post on Facebook or Twitter it could be "_____ rates <film> !"
Would be interesting to see if they have any plans to add that back, but otherwise, this type of solution sounds like it might not be possible.
Does Netflix listen to its customers? I've hated the website redesign since it launched and from what I've read, I'm certainly not alone. I find the redesign to be much less user friendly than the old one, which I loved. I don't login as much as before to browse, review and add to my queue. I avoid the website and stick to watching stuff on my Roku. In my opinion, the redesign took the Netflix website from one that was fun to use, to one that devalued the company to being just another company that provides movies. The charm is gone.
And now this odd, Qwikstupid thing. That site isn't even up yet. Is it because they planned it that way, or are they looking for customer feedback first before making any concrete changes?
And that takes me back to my original point: does Netflix care about customer feedback?
(edited for my terrible typos)
June 19, 2008 - Removing Profiles - http://blog.netflix.com/2008/06/profiles-feature-going-away....
June 30, 2008 - Nevermind - http://blog.netflix.com/2008/06/profiles-feature-not-going-a...
(Work has any URL with "netflix.com" blocked, so I'm guessing these are right blog posts.)
I also remember vocal user feedback telling them not to switch to Silverlight, for that matter. I was one of the many who stopped being able to use their streaming service when that change went through, until I recently bought a PS3.
As far as giving feedback or suggestions voluntarily as a customer, good luck. You can't do it on the website & any suggestion you give to a customer service rep stays with the customer service rep & goes no further. It's a sad state of affairs when the best 1-on-1 communication with customers Netflix has had as a company is their CEO doing damage control in Facebook comment threads.
I can think of 2 off the top of my head:
- You used to be able to easily access a page of latest release DVDs. They killed this page because "too many people were using it" - and they had a pretty audacious blog post assuring that now it is a better customer experience claiming "it caused contention to ship" - although I never had a problem and sorely missed the feature when it was gone
- You used to be able to see the top 50 streaming movies. It almost always had the top new hollywood blockbusters which I really wanted to see. This feature vanished one day with no explanation that I could find.
The new site redesign is also a good example, making it harder and harder to find the movies you actually want to watch.
For these reasons alone I was a relatively happy customer but I would never have invested in them as a company due to their lack of customer focus. This latest price fiasco was the nail in the coffin. I cancelled my membership.
For the price of the streaming plan, I will just watch one or two movies a month on Amazon Instant Video with a much bigger selection and much stronger customer focus. All the nice features which Netflix killed for no reason are featured prominently on the Amazon web page for starters.
It's almost like an insurance company -- they want you to buy their plan, but not actually use it! (Why, then they'd have to pay out to the movie studios!)
I've stopped trusting the Netflix so-called "Latest Release" and other lists a while ago and started using http://instantwatcher.com for this reason. Good filtering & sorting features.
As a Netflix user for 5+ years, I for one can't wait until a viable competitor with equivalent selection emerges.
I hate their new site, I think Qwikster is a good idea poorly executed, but if they have good movies I'll still use them. If they continue to have crap, will cancel my Netflix account sooner rather than later and happily go back to piracy.
I can't wait for a viable competitor with equivalent selection AND device coverage emerges.
They want to kill it fast because streaming customers are more profitable. They want you to switch from physical media to streaming NOW.
Yes, yes, I know you can't get that esoteric or new release by streaming. There's a ton of stuff that never made it to DVD that is still on VHS or Beta. I don't see you crying over that.
Netflix knows this. They are accelerating the switch and they're doing that by killing their DVD division in the most horrid way possible. That game rental thing is a bone meant to mislead you and is absolutely pointless. That part of the rental industry is being killed off by Steam. They know that too.
I do agree that, if they wanted to get rid of their original line of business without looking like that's what they were doing, this would be the best way.
Simple reasoning will get you to that conclusion. There are no physical plants to maintain. No physical inventory to maintain. No postage costs.
You do have the costs of bandwidth, computing power, and licensing fees. I would imagine those are less than the above.
On top of that, they wouldn't be throwing everything into streaming unless they were making more money there. Even the most retarded of businesses will focus on a more profitable line than a less profitable one.
On top of that, those servers don't run themselves and those infrastructure costs you so quickly dismiss are significant.
* similar = streaming and disc media - it's the adult space, not mainstream video
You're also making the assumption that aside from the distribution mechanisms, everything else is the same. That's far from the truth. Netflix most likely has to do separate deals with the content owners for DVD and for streaming that likely have vastly different terms.
You're also ignoring the possibility that Netflix views the DVD side of the business as a noose around their neck in negotiating deals for streaming content with the content providers, and the separation is an attempt to free up their hands.
I hope so, but it doesn't appear that way. Netflix has alienated a large number of its customers.
I know you can't get that esoteric or new release by streaming. There's a ton of stuff that never made it to DVD that is still on VHS or Beta. I don't see you crying over that.
Those are different issues. No one probably cares much about those esoteric shows you're talking about, but they certainly do care about whether they can get mainstream movies if they're paying a monthly fee for streaming. And right now, it's a wasteland: B-movies, old movies, and some UFO documentaries. Starz sometimes added something of worth, but Netflix blew that deal -- Starz is gone.
If all this activity by Netflix is part of some intelligent design, I'd really like to understand it, because right now, it looks more like a suicide attempt.
Not trying to single you out, but let me get this straight... You liked the service enough to keep it for 5 years, the service has not changed substantially to the point where competitors have suddenly become attractive and you still want to ditch them?
It's just the company's new strategy. Do I think it was a good idea? Not really. But it's not like they're killing people. Is this really a good reason to go all nerd rage on a company and start cancelling subscriptions?
With plans to sell there was only two things that would have been even more bone-headed than what they did:
:a => "Sell it as Netflix DVD (or something like that) and have two companies named Netflix running around."
:b => "Sell it and force the acquiring company to change the name, in which case they would have to accept a huge discount on the value of the business."
Sure, PR can spin anything to seem pretty, but sometimes its really just better to admit failings (pricing changes) and show that you're not perfect.
Am I the only one hearing a hint of condescension here?
It could be Qwickster, Quickster, Qwikster, Quikster, Qwickstr (if you wanna go the Flickr route) and probably some variations I haven't thought of. At the very least, Netflix should have made an effort to secure the domain-names for these alternate spellings to ensure their customers can find them when they finally go live.
The other other difference is that iPad, iPod, iPhone, etc. actually describe their eponymous products, and Qwikster doesn't recognizably describe anything.
iPhone? Sure. iPad? Maybe. iPod? Definitely not.
It only seems that way because the iPod dominated the product category so strongly as to become synonymous with "portable digital music player."
Same thing for iPod. It's pod-shaped (or was when it was introduced) and it's a pretty simple mental leap to classify this "pod" as a thing that you put your music "into".
By stark contrast, "Qwikster" has absolutely no mental, cultural or conceptual link to the product or service it describes. It's worthless as a name in addition to being confusing, already taken by various other services, impossible to spell, and dorky.
Not really debatable.
Not saying I like "Qwikster," but it's just not the case that the word "iPod" sounded like a music player before Apple made it famous.
And the correctly-spelled Twitter name! http://twitter.com/#!/qwikster
Now you may then ask, 'why the fee hike?' Simply put, the math doesn't add up otherwise. To keep $9.99 pricing we'd have to do something like $4.99 for DVD rental and $4.99 for video streaming. Compare our DVD pricing to Blockbuster -- even at $7.99/month we're still cheaper. $4.99 for video streaming would only barely cover our licensing costs. We found a reasonable price point that allows us to offer great DVD and streaming services going forward."
The real complaints dealt with the separation of the services and thus the separations of the ratings system and of queue management. This letter does not address either of those issues, and thus would fix nothing.
> Members can log into both sites using the same login. This will allow streaming-only members to add DVD by mail, and DVD-only members to upgrade to streaming, at any time. The websites, however, will remain separate, so that we can start giving these different worlds the unique attention they deserve.
Sounds like they are being separated to me.
But it's fairly obvious that this plan was too qwikly put in place, without proper due diligence. They didn't even bother to get the rights for @Qwikster on Twitter BEFORE announcing this, which was a huge PR blunder. 2 weeks ago, they could have bought the name for $1000 from this pot-smoking kid, but now I think it's worth at least 6 digits to them, just to end the embarrassment.
It could be Netflix:Online and Netflix:Offline or Netflix:Instant and Netflix:Delivered etc.
Similar to HP, Netflix made the huge mistake of announcing big changes in one big lump, creating a chaotic reaction. They probably should have waited a little to announce the split.
Keeping the Netflix name for both companies would have been a great idea (see the two Motorola companies), as commented here it was done this way most probably because they will sell the DVD business and use that money to invest in streaming.
I don't understand why Reed and the rest of the team at Netflix are throwing away such an incredible business. Like any business that offers both old and new options, they should have merely announced a plan (much like what was suggested in this letter) to slowly phase out DVDs and educate their customers on the benefits of streaming (as well as developed a plan for making more DVD-only content available via the streaming service). This just feels like that scene in the Beach where the guy gets his leg bit off by a shark and is taken out into the woods to die slowly. Despite this mistake, I still love Netflix (it's my primary source of television save for torrents). I hope they can recover from this and really turn around the brand. If not, I'll be really sad if I have to subscribe to cable again.
That way customers will remain happy, and the Qwikster brand could be sold to someone that wanted a business that has a sustainable deal with the content providers...
Netflix broke their API with their customers, so they're gonna be confused and upset. No explanation, no matter how good, will fix that.
It's like when you write a long comment in some code to explain why your code is goofy. Just fix the code!
In this case netflix needed to make their site more usable and make the pricing distinctions between streaming and dvd more clear.
New company, new prices, new billing options. Wayyy to much info for your avg customer. Netflix is way too confident if they think, customers won't cancel their plans with all these questions being raised. Once a customer starts to think about all these options, they might just think I don't really use Netflix much anyway!
I don't want a unified queue, because I don't want a queue for my streaming service. I can think of many ways in which I would want integration between my activity in each service, of which a unified queue is one of the least innovative and least helpful.
I have to believe that, even if Netflix/Qwikster can't provide useful integration, someone can. Despite my initial negative reaction to the split, these opportunities actually make me a little excited.
I believe that DVD will eventually die and streaming will be the primary way to watch movies, but the streaming selection just isn't there right now, and splitting the company like this forces customers to deal so heavily and directly with delivery methods that it dissolves that abstraction layer that made Netflix so valuable in the first place. They now have to sell potential future (and unhappy existing) subscribers on 2 new separate products: a "DVD delivery service" and a "movie streaming service", neither of which really measure up the the way the combined system did, and for the same price!
As they had to say in the licensing "x amount of users have streaming" when only a percentage had ever used it".
The idea was they could now say "These users are specifically paying for streaming". They'd already split up the two plans into two different business departments.
In my opinion they should have offered a streaming plan, DVD plan but let DVD users pay a small premium to access streaming instead of doubling their core users bills, if they wanted to sort this licensing issue.
That's why we can't have a shared queue or keep the same name or keep the pricing unified on the bill. All of this is simple to do if Quikster is a subsidiary but I wouldn't be surprised if Netflix already has a buyer for Quikster lined up. These changes have the stink of "buyer requests".
The conspiracy theorist in me leads me to suspect it's somehow related to cost of licensing content for streaming, and negotiation positioning with Hollywood. That by burning the DVD bridge, Netflix can somehow lower costs dramatically or make their position in negotiations better. (But don't ask me how.)
Otherwise I have to believe Reed Hastings picked the wrong week to start sniffing glue.
It's kind of refreshing to see such a textbook, illuminated lesson in bad management in the tech world, when usually all we get to see are the all-stars.
Better to make a clean break now.
The only way the Netflix Classic plan makes any sense is as a staging post to splitting the company in two. This would have been good PR as well as a sensible internal business step. It lets everyone get used to the idea gradually.
I wonder if Reed hastings was drunk or high when he made these announcements and wrote that blog post. Hard to believe someone who built a business so shrewdly could screw up like this..