Netflix Separates Mail from Streaming: What to Do Now?

This morning, if you are a Netflix subscriber you were apologized to, so let me start off by apologizing for not covering the big Netflix news this summer, which now matters all the more after the most recent announcement.

The company’s announced change in pricing structure, which takes effect this month (for me on Wednesday in fact), charges significantly extra to retain both its flagship DVD-by-mail service along with Watch Instantly streaming service. The move angered the subscriber base to say the least. As much as many enjoyed the complimentary streaming service, many were cognizant that it was just that — complimentary — and that something would give: either fewer streaming titles or a higher cost. But as any businessperson knows, taking  something away from your customers or charging them for something once free doesn’t go quietly.

As such, CEO Reed Hastings sent all subscribers a personalized letter of apology for not explaining the changes earlier that attempted to now explain the company’s motives and more importantly improve its image. It basically says Netflix has been trying to identify what the demand is, and the demand is shifting to streaming services, so rather than get too protective of its flagship DVD-by-mail service and die with the likes of Borders, AOL dial-up and (the unmentioned) Blockbuster, the company put the first stepping stone in place to make a full transition to a streaming-first company. You can watch Hastings explain the changes in detail below.

Now, a second stepping stone has been put in place. The company has introduced Qwikster, the re-branded name of its DVD-by-mail service and a terrible name considering the similarities to movie social media site Flixster, but the company plans to make PS3, XBox and Wii games available. If you’re more interested in that and how it might affect Gamefly, check out Player Affinity’s article here.

The Qwikster service will be a sibling site of Netflix to some extent: the interface will be the same for smooth transitioning, but you pay with a different credit card, manage the queue separately and Netflix and Qwikster will not be integrated. That means you will have to rate movies on both sites for them to process recommendations using the site’s notorious algorithm.

As I alluded to, I was among the most affected of the demographic with my 1 DVD-at-a-time plan that included Watch Instantly. Those of you in my shoes all had a similar question to answer: dump the mail service or accept the price hike?

Unlike many of you, and I say this to clarify my perspective only, my Netflix was presented to me four years ago as a generous gift which rather than having other gifts in coming years, I opted to renew year after year, so over the summer I made no changes to my account. Now, however, I have to reconsider.

I don’t blame Netflix for rebranding the DVD-by-mail service, but I feel the bad move here that could hurt them is the lack of integration. Unless the company has something sick up its sleeve for the streaming service that will bring in tons of new streaming customers and render the folks clinging to snail mail irrelevant to the company’s growth and overall profit, having two separate sites could hurt Qwikster in the long run.

I have absolutely no interest in visiting two sites to manage two queues. It’s pain enough to do it on one site. I also don’t want to have to check Netflix to make sure that something isn’t streaming before I order it through the mail. Knowing Netflix, however, when you hover over a movie on Qwikster if it’s streaming on Netflix they’ll have a link to Netflix sign up so you can “watch this movie right now!” — but that’s still annoying. I also don’t want to rate movies on both sites to get optimal recommendations.

As far as payment, there’s a big difference to me on a credit card statement that reads one charge from Netflix for $15.99 compared to two side-by-side charges of $7.99. Seeing them as separate makes one seem expendable, which of course would be the mail service. My Netflix benefactor and I will likely have to have a conversation now …

With these two services separated, Netflix has shown it’s more interested in streaming and cares little for the mail customers and their service. Why? Because as Netflix finds new ways of getting better through securing more titles and content, the more irrelevant in renders the mail service. I still subscribe to the mail service not because I prefer it to streaming, but because the title selection is infinitely wider. If I decide today that I want to watch “Forrest Gump” because on Wednesday the bar I go to for trivia will dedicate an entire round to that film, if that’s not available on instant and all the brick-and-mortar stores near me are dead, mail service is my only option. Hopefully I get it in time, but that’s another matter.

So, my conclusion? If you’re still clinging to both, jump the mail ship and go to streaming. It’s the future and Netflix has just made it clear that’s where it’s focused. Unless you would be interested in the video game options, there’s nothing to benefit you on Qwikster. I know, it’s tough, I prefer to have the mail service as a safety net too, but unless they change the price model of Qwikster to a per DVD basis (a la Redbox), subscribing to something Netflix is trying to render obsolete sounds like a waste of money. I’d much rather pay a dollar a piece to rent the 4 DVDs each month that I want to watch that I can’t get anywhere else but through mail than bay $8 for as many as I can watch, especially if streaming accumulates more and more titles.


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