Netflix has announced that it will be separating its streaming business from it’s disc-based business. A new spin-off company named Qwikster will handle disc-based rentals, including videogames. Similar to Blu-ray pricing, videogames will be an optional premium service on top of the monthly Netflix Qwikster fee. In a letter to Netflix customers, CEO Reed Hastings wrote:
Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. 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. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.
A-ha! All of the sudden Netflix’s recent price increase makes a lot more sense! It will be interesting to see how this all pans out. Obviously streaming is where all media is heading, but many consumers still prefer discs due to things like DVD features, multi-language subtitles, and the unmatched quality of Blu-ray. There are also more movies and TV shows to choose from on disc, though the gap is getting smaller all the time.
Then there’s the GameFly factor. It’s very, very smart for Qwikster to get into the games business. GameFly is, by far, the leading rental service in the country. I wonder how many people have both Netflix and GameFly subscriptions. I also wonder how many of those people will cancel their GameFly subscriptions when Qwikster game rentals become available. Since I’m doing a lot of wondering, I’ll just wonder about the number of people that were considering cancelling their Netflix subscriptions, but are giving it second thoughts now that games are part of the mix.
Naturally, I want to know what you make of all this (I can make a brooch or a hat or a pterodactyl!). What do you think of Netflix as a standalone streaming video service? What do you think of Qwikster as a service that lets you rent movies, television shows, and games? Will you subscribe to both, one, or none of these services? You think the peeps at GameFly ought to be worried? Shout it out in the comments section (please)!
