The Netflix Break-Up Into Streaming and DVD Companies Makes No Sense

By 09.19.11

First is the obvious, which is that it'll be incredibly inconvenient. Instead of having to maintain one queue of movies and TV shows, you'll have to keep two going simultaneously. What will ensue is a completely unnecessary “stream or DVD?” dance in which you'll have to jump back and forth between the two services to see what's available where. At least now in Netflix when you add a movie to your queue you can see what you can watch instantly. All this will be even more annoying on your mobile app. The current Netflix app already only offers what's streaming, so you can't rearrange your DVD queue away from a browser. You wonder if Qwikster will even have its own app.

But here's the real problem with this move, at least from a business point of view: When the split takes place for real in a few weeks, both entities are going to be significantly weakened and vulnerable to competition. Netflix essentially wants to spin off the DVD mailing section because it isn't profitable; their hope is that they can then sell Qwikster and keep the streaming company, Netflix, going. So they want to get rid of the part of their business that is most dominant and has most market share and is most reliable (because every DVD is available on it).

Streaming, meanwhile, is the most underwhelming part of the business. Yes, some TV series like “Friday Night Lights” and “Breaking Bad” have found their way onto it, and the occasional new film release ends up on it as well. But though streaming certainly is the future, and larger, more enticing offerings can be expected, Netflix will now be competing directly with the Amazons, Apples, and even Wal-Marts of the world. It won't be hard for those giants to catch up on the streaming front because Netflix doesn't offer that much in the first place. And then what happens if one of those companies buys Qwikster, turns it profitable, and allows a simultaneous streaming-DVD queue? Netflix is essentially shooting itself in both feet.

All of which means that the real loser in all of this is the current Netflix subscriber, who has to pay more money for less convenience, and whose loyalty to the service is being disregarded.

Anyway, this is just one angry subscriber's early morning rant. Sound Off in the comments if you agree or disagree, or if you have a better solution for watching movies at home and on the go.


Join The Discussion

Comments are closed.