Netflix: Am I the only one who thought Qwickster was a good idea?

       Over the past few years, Netflix has exponentially grown.  It has killed most of the market when it comes to renting movies.  Blockbuster is only now trying to make a comeback.  But in early September, Netflix tried a new business plan.  They proposed having Netflix handle online streaming while setting up a new company, Qwikster, to handle by-mail DVDs, Blu-rays, and video games.  For some reason the public became outraged at this, and Netflix’s small price increase, which resulted in 800,000 members canceling their service.  Shortly after, Netflix announced they would stay as one company and ditch the Qwikster idea.  My question is why this was such a bad idea in the first place?

            The future of media clearly points to subscription based, online services like Netflix.  Most people who are reading this have seen the demise of VHS to DVD and now DVD is moving to Blu-ray (remember HD-DVD briefly?).  As this migration happens, the online channels, such as iTunes and Netflix, now provide a pretty high quality product at the ease of the public.  What I think Netflix did was notice this shit and decided to consolidate their forces.  To have one company, Netflix, focused on streaming alone it allows for them to stay ahead and refine their service.  This also would work great from their new company, Qwikster, to focus on the tangible renting market; noting that they planned on adding video games, a service Netflix has yet to offer. 

Now I saw this as an advantage to both the company and their customers.  If Netflix stuck exclusively to streaming, then they would have had to add movies to their library.  They may have even made the majority of all their movies available for instant streaming for their same $8 monthly price.  That would be extremely attractive to new customers.  Since they decided to keep it one company though, now they can keep many popular titles to dvd only.  And what will this mean for the video games?  The company can have the advantage of having two companies.  Years from now, when media is predominantly online, Netflix would have the comfort of already having a company just for online.  They can make the switch now and just hold Qwikster as an expendable company.  The way they were designing it wasn’t even going to follow the same brand scheme as Netflix.    Qwikster could have been dropped or re-absorbed when physical copies become more obsolete.

            Instead, the public freaked out.  Now Netflix will remain one company.  Blockbuster is now on the rise again as well, providing streaming, rentals, and video games….they may still even have a store or two open.  I’m interested to see how this all plays out.