Netflix was one of the most beloved companies in the world. For $15 per month, users could have two DVDs at a time delivered to the home plus have the ability to stream movies over the internet to computers and TVs (via internet-connected game consoles.)
All that changed in July 2011 when Netflix announced that it would effectively raise its prices by 60% starting in September. Over the next three months, the service lost 800,000 DVD customers and 200,000 online users and its stock price dropped by 60%, according to Steve Frankel, a Dougherty & Co. analyst (http://www.bloomberg.com/news/2011-10-15/netflix-bets-new-content-deals-will-be-mea-culpa-to-angry-users.html)
Then in mid-September, Netflix announced that it would separate its DVD service into a completely different company called Quickster. This enraged customers who had spent years building their DVD queues on Netflix only to have to recreate them on the new service. This time, Netflix responded to consumer pushback, cancelling the Quickster idea by the second week of October.
Netflix tried to explain its rationale, citing the dollar cost for mailing DVDs and the coming obsolescence of that format. Still, its loyal clientele felt deeply betrayed by a brand they had come to love and depend on.
And yet, Netflix remains the premier service for renting DVDs. Their library caters to “the long tail,” making available obscure films that appeal to niche markets. They also offer Blu-Ray discs which offer crystal-clear movie viewing.
Their streaming library, on the other hand, often lacks compelling films and television shows. Also, the streamed quality of the films is not always the best, looking a bit fuzzy, especially compared to the resolution of a Blu-Ray DVD.
Yet, in spite of the price increase and the loss of STARZ content including programs from Sony and Disney, Netflix remains a good value. The site has added a portal devoted to children’s programming, an important service for anyone with kids.
It is clear that Netflix will emphasize its streaming service at the expense of its DVD delivery. The Netflix Android app won’t even access DVD selection. Still, DVD users will be relieved to find, when they visit the web site, that their queue is still there.