Netflix Formally Rebrands DVD Services, Adds Video Game Rentals

When Netflix announced last summer that their DVD delivery and streaming video options were to be split into two separate packages, customers were suitably angered. Being forced to pay for two services that used to be treated as one was bad enough, but the company’s sneaky stealth announcement of the change was perceived as a particularly rude face-slap. Aware of that backlash, this morning Netflix CEO Reed Hastings* sent an email to Netflix customers acknowledging the bad reaction to the service-split (with a mild non-apology apology) while also formalizing it.

In a few weeks, Netflix will officially begin treating their streaming video and DVD delivery services as entirely different businesses. Streaming video will continue to be called “Netflix”, while the DVD delivery service will be spun off into an entirely distinct entity of its own. This means that customers will no longer be able to purchase a ‘streaming + delivery’ Netflix package. Instead, they now will be billed two different subscriptions, as though they were using two entirely unrelated services. And in a way, they are, because the DVD delivery will be renamed “Qwikster”.

But forget about that awful name for a second. The new, stupidly-named DVD delivery business will retain the same service that Netflix customers are used to, but the real news is the addition of video game rentals. Great news for people who would love to rent video games but don’t want to subscribe to yet another service. The catch? Here it is from Hasting’s email:

One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games.

He doesn’t come out and say it, but the Blu-ray ‘upgrade’ he refers to costs customers an additional 2 bucks a month. Maybe you don’t want to pay it, and who could blame you – I sure as hell don’t like the idea of “Qwikster” being on my monthly billing statement – but Hasting claims that aside from this implied small upgrade fee, “There are no pricing changes (we’re done with that!).” Even if Video Game rentals cost $9.95 or so, that’s still loads better than GameFly’s $14.99 monthly cost for one-game-at-a-time.

But seriously. “Qwikster”. What the hell are they thinking?

If you’ve spent any time in LA, you’ve probably at least heard of Pink Dot, the delivery-only chain of convenience stores that delivers anything from food, booze, even pornography to you 24 hours a day. At its 1990s peak, Pink Dot had stores all over LA, the Valley and Orange County and got shout-outs in several films. Nowadays, it has been reduced to a single remnant on Sunset Boulevard.

What the hell happened? Bad business decisions, that’s what. In 2000, the company partnered with online delivery service Kozmo.com, grossly over-expanded and changed the company name to ‘PD Quick’. Bad move guys. The name change confused customers and Kozmo soon went out of business. Pink Dot was barely able to extricate themselves from the partnership before being ruined by it, but the damage had been dealt and within 4 years, all locations except for their Sunset shop closed.

What’s the point of all this? Rebranding only works if you’re simply making official what is already slang, like KFC. A lesson Netflix is soon to find out for themselves. It is monumentally stupid to separate what was their core business for so many years from the streaming service. Especially since it takes so. God. Damned. Long. for movies to actually make it to the streaming queue. At least currently, when you search yet again for some movie that damn well should be streamable but isn’t, you see “DVD only” so you at least feel like the option is there, even if you choose not to take it. Netflix’s decision to entirely separate the two services – and that includes the fact that “the Qwikster.com and Netflix.com websites will not be integrated.” – means that their pathetic streaming selection is about to be laid bare for all the world to see.

I think we’re going to see a lot of people checking out Vudu a lot qwikster** than Netflix would like.

Hastings discusses these changes in more detail in a post to Netflix’s blog.

*Honestly, why isn’t this guy in the adult film industry? That’s the best porn name ever.
** zing.

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2 Comments on Netflix Formally Rebrands DVD Services, Adds Video Game Rentals

JosephPS3 Dead State

On September 19, 2011 at 1:18 pm

man I feel sorry for anyone who owns Nflx stock. Its been taking a dive last few days.

Fraz

On September 20, 2011 at 2:38 pm

That’s a good point about the separation of the queues… “Qwikster” movies that can’t be streamed won’t be DVD only, they will just fail to exist. Very different psychologically.