x PhoneArena is looking for new authors! To view all available positions, click here.
  • Home
  • News
  • Netflix to exit DVD business; CEO Hastings apologizes for rate hike fiasco

Netflix to exit DVD business; CEO Hastings apologizes for rate hike fiasco

Posted: , by Alan F.

Tags:

Netflix to exit DVD business; CEO Hastings apologizes for rate hike fiasco
Big news from Netflix tonight. First, CEO Reed Hastings issued a mea culpa about how Netflix handled the recent rate increase. Hastings admits to mishandling the rate hike fiasco, but will not go back on his plans despite complaints from customers. Hastings, in a video, apologized to customers for not explaining the thought process that went into the rate hikes for those customers who want both physical DVD discs and the ability to stream video over a mobile device. Hastings says he is not apologizing for the actual rate hike, just the fact that he was not totally clear in explaining the action.

Speaking of plans, Netflix says it will exit the DVD rentals business and concentrate on the streaming of videos to handsets, game consoles and video boxes. Netflix will spin off the DVD rentals business to a new company named Qwikster. The split will happen "sooner than later"  and Netflix adds that its streaming service is going to become more attractive in the near future. As Hastings says, "The additional streaming content we have coming in the next few months is substantial." Hastings says that both DVD and streaming will benefit from the separation. Andy Rendich was named the CEO of Qwikster. Until Qwikster is spun off or sold, it will remain a separate unit of Netflix.

As far as what will happen to those with current Netflix DVD accounts, we assume that they will be receiving some word from the company about how they will be converted to being a Qwikster customer. In reality, it should be just a matter of crossing out Netflix on the invoice and writing in the new company name. One change that will make many happy is that Qwikster intends to add video games to its rentals lineup.

source: YouTube via AllThingsD

33 Comments
  • Options
    Close




posted on 19 Sep 2011, 01:15 1

1. Krishaun27 (unregistered)


I use the dvd rental much more than streaming anyway, streaming consumes too much data.

posted on 19 Sep 2011, 03:41 2

11. jogutier (Posts: 324; Member since: 12 Feb 2010)


Looks like blockbuster will be making a come back after all.lol

posted on 19 Sep 2011, 10:37

20. c.hack (Posts: 519; Member since: 09 Dec 2009)


Yup. I switched from Netflix to BB Xpress. Lots of free rental codes out there too. Amazon Prime for streaming. I dropped Netflix 2 months ago after they announced the price increase and don't miss it one bit.

posted on 19 Sep 2011, 15:05

29. ZayZay (Posts: 565; Member since: 26 Feb 2011)


That's why you should have Sprint.

posted on 19 Sep 2011, 01:19

2. Wesley P (unregistered)


OH WOW! I wonder what is going to happen to Netflix now...This is the beginning of a new era for movie rentals. I don't believe that this is the best move for Netflix. How are they going to fix contracts with the streaming partners?

posted on 19 Sep 2011, 01:41 1

3. kingjr243 (Posts: 31; Member since: 06 Jun 2011)


They need to upgrade the quality of the movies they put out cause mostly all of them are old

posted on 19 Sep 2011, 20:07 1

32. Sellcell (Posts: 118; Member since: 16 Mar 2010)


I completely agree with you. It seems like they put movies on there for the retirement homes.

posted on 19 Sep 2011, 02:00

4. Mr.Mr.Upgrade (Posts: 425; Member since: 30 Aug 2011)


Well,well well, how many stupid business people in the world, netflix word of advice, don't put Ur self above Ur customers, specially when u not the only top dog in town, vudu,redbox,and even, video game stores, and don't forget, blockbuster streams, and have video games ,dvd, bluerays for cheaper, Wat a dumm move,and there are even sites to watch movies that are in the movie theater, for free,

posted on 19 Sep 2011, 02:07 1

5. The_Miz (Posts: 1496; Member since: 06 Apr 2011)


Yaay Netflix, kill off the thing that made you successful in the first place along with killing jobs.

posted on 19 Sep 2011, 03:30 2

10. Sniggly (Posts: 7183; Member since: 05 Dec 2009)


Um, Miz, you DID read the article, right? They're not killing their DVD business, just spinning it off. Granted, I don't know if the revenue will still continue to flow back to them somehow, but I can't imagine that they'd completely destroy their footing in the industry.

posted on 19 Sep 2011, 10:38

21. c.hack (Posts: 519; Member since: 09 Dec 2009)


Yeah, they're just burying it under a pile of rocks under the sea bed, not really killing it. Get real! Netflix is DEAD.

posted on 19 Sep 2011, 11:43 2

23. remixfa (Posts: 14178; Member since: 19 Dec 2008)


based on?

posted on 19 Sep 2011, 12:49 1

26. lolnotreally (unregistered)


lol this shows you how dumb miz is pretty funny! what a dumb troll.

yablow kid

posted on 19 Sep 2011, 02:11 1

6. JeffdaBeat (unregistered)


I just got the email...

First off, they are the same company, they are just changing their branding. Netflix will be streaming, Qwikster will be the DVD by mail. That's the only thing. Plus they are adding in video games (definitely down for that).

My question is, are they rolling off a new company or just adding a subsidiary...

posted on 19 Sep 2011, 02:42

8. Droid_X_Doug (Posts: 5955; Member since: 22 Dec 2010)


It sounds like the plan is to spin off Qwikster once they get enough traction in the streaming business. My question is whether they will get the traction they are looking for in streaming. If they are expecting mobile streaming to be their growth engine, that kind of runs up against the monthly caps in the carriers data plans. Even unlimited customers are getting throttled, and over time, I suspect the universe of unlimited plan customers will diminish.

Net-net, I tend to doubt that the streaming business is going to give them the traction they are looking for.

posted on 19 Sep 2011, 07:05 1

18. remixfa (Posts: 14178; Member since: 19 Dec 2008)


netflix makes less money the more you actually watch. they have to pay to keep up all that bandwith on your end. The goal is to offer crap tons of content that is appealing to get users up... who then hopefully only watch it a few times a month... essentially free money.

They hate users like me. I got rid of all cable services and went netflix/hulu/ antenna only.. with netflix consuming probably 80-90% of what we watch.

posted on 19 Sep 2011, 13:18

27. shimmyx20 (Posts: 280; Member since: 03 Mar 2009)


I'm the same way. Between Netflix and Hulu Plus, I've been able to cancel my cable TV subscription.

There's actually some really good content on Netflix. Yeah, they may not have the most popular movies, but hey why not go outside your comfort zone and discover some new movies. Plus there's some excellent documentaries, and a good selection of TV shows

posted on 19 Sep 2011, 21:01

33. remixfa (Posts: 14178; Member since: 19 Dec 2008)


that netflix reccommends thing has turned me on to so many programs its not funny. i always find new content in there.

posted on 19 Sep 2011, 02:26

7. Forsaken77 (Posts: 552; Member since: 09 Jun 2011)


cancelled my netflix account yesterday. Not worth it, streaming anyways, until they get some decent content.

posted on 19 Sep 2011, 11:44 1

24. remixfa (Posts: 14178; Member since: 19 Dec 2008)


they just added pixar movies. :) how can u say no to that :)

posted on 19 Sep 2011, 03:28

9. Sniggly (Posts: 7183; Member since: 05 Dec 2009)


Okay, I understand the rate hike better now. To me streaming content is worthless as all the companies, both landline and wireless, are moving to capped data plans. Granted, wired companies' caps are much higher and less expensive, but there's still a cap and it could be lowered. It's a negative direction for the industry, especially for companies which have already built the infrastructure and have pretty much paid for it.

posted on 19 Sep 2011, 11:46

25. bolaG (Posts: 468; Member since: 15 Aug 2011)


What? Land line companies are going to cap their data plans??! Where did you get this info?

posted on 19 Sep 2011, 21:02

34. remixfa (Posts: 14178; Member since: 19 Dec 2008)


comcast, att, and others were talking about capping data plans for landlines. The cap would be much higher than 5gigs, but a cap is a cap.

posted on 19 Sep 2011, 04:59

12. VZW4LIFE (Posts: 34; Member since: 11 Jun 2011)


As long as Netflix allows their entire selection to be streamed..... I feel this is a good decision.

posted on 19 Sep 2011, 06:05

13. vvelez5 (Posts: 623; Member since: 29 Jan 2011)


Not liking this move. If Netflix can't get new releases on their instant streaming and quikster ends up being pricier than netflix DVD rentals, I will probably move on. Shame too Netflix had a great product and idea.

posted on 19 Sep 2011, 06:31

14. Mooooo (Posts: 212; Member since: 27 Aug 2011)


I was one of many that cancelled Netflix when they decided to do this rate hike. I do not miss them at all. I can find most of what i want to watch free online.

posted on 19 Sep 2011, 06:55

16. Mjh (unregistered)


I hear you! Cable tv and Netflix are for suckers!

posted on 19 Sep 2011, 06:53 3

15. thatjackal (unregistered)


I love the move! I'm a streaming-focused customer and the more they focus on streaming the happier I am! I don't get why everyone complains about pricing though, 8 bucks is what I spend on lunch a day, instead getting streaming for a month..

posted on 19 Sep 2011, 07:05

17. Knicknevin (Posts: 138; Member since: 18 Mar 2011)


While I appreciate the news, this doesn't exactly fall into the area of phones...

posted on 19 Sep 2011, 07:07 5

19. remixfa (Posts: 14178; Member since: 19 Dec 2008)


netflix streams to ioS,android, and WP7.. so it does.

posted on 19 Sep 2011, 10:40

22. c.hack (Posts: 519; Member since: 09 Dec 2009)


Great. Now that they lost Starz and Disney movies and jacked up prices, they're getting rid of DVD rentals. Another business going the way of AOL and Facebook. It was nice while it lasted.

posted on 19 Sep 2011, 14:20 1

28. MorePhonesThanNeeded (unregistered)


Lmao, Facebook? Facebook doesn't seem to be losing any of it's steam and I dislike facebook to no end. You mean Myspace perhaps!

Lots of complaints but I don't get it, all the other streaming only online services cost the same, so what are people really crying about? Probably because Netflix used to be the cheapest while offering both streaming and physical media. Free ride is over, enjoy it while it lasts, no point in complaining and telling the world how you were so mad with the rate hike that you cancelled. Good for you, now you can go search online for your videos you won't find in the same quality and unlimited viewing. But hey lets stick it to the man for obviously not making the reason for the hike clear to all. I enjoy my Netflix streaming and 8 dollars a month isn't bad at all, they do seem to be getting more content a little quicker now.

posted on 19 Sep 2011, 18:26

30. El Boy (unregistered)


I Guess Redbox has started to kick Netflix's butt!

Want to comment? Please login or register.

Latest stories