The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

The student news site of Marquette University

Marquette Wire

Recent blunders could lead to Netflix’s demise

The days of driving to Blockbuster and searching the aisles for a movie have long passed, thanks to newer technology that has pushed rentals from corner stores to kiosks, mail-order and online sales. But Netflix, one of the largest providers of online video streaming, has been questioned by customers and analysts alike about their business decisions in recent months.

The fallout has been so great that earlier this month co-founder and CEO Reed Hastings wrote out a lengthy apology on the company’s blog that was also sent to subscribers, taking the blame for poorly communicating about price increases in July. The apology also provided Hastings and the company with an opportunity for rebranding, with the announcement that their DVD-by-mail service would henceforth operate through a separate company called “Qwikster.”

“I messed up. I owe everyone an explanation,” Hastings said in his Sept. 18 blog post.  “It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes.”

The announcement left prices unaffected, but drew further ire from a large number of the nearly 30,000 people who commented directly on the blog post using their Facebook accounts.

Hastings said the rationale behind recent decisions has been to keep up with current trends in entertainment, saying businesses often die out because they move too slowly.

But the decision to move may have negative effects as well. reported last week that the company has lost half its market value since the price hike in July. Similarly, The Associated Press reported Netflix has lost 1 million of its former 25 million subscribers in the past quarter.

Another wallop headed Netflix’s way is Wednesday’s announcement of the Kindle Fire tablet, produced by Amazon. The new tablet was coupled with Amazon’s earlier announcement Monday that it had reached a deal with 20th Century Fox to stream its content on Amazon Instant Video, a streaming service similar to Netflix.

Still working in Netflix’s favor for the time being is their larger catalog, in comparison to Amazon. Amazon Instant Video currently offers about 11,000 titles for streaming, while Netflix has more than 20,000 titles available. Netflix also has new acquistions of their own to report, having recently inked deals with Discovery Communications (including Discovery Channel, TLC and Animal Planet channels) and DreamWorks Animation.

At Marquette, it is unclear whether students will continue to use the product, or switch to alternatives.

William Walkenhorst, a junior in the College of Engineering, said he used to have Netflix through his parents’ account. He said the selection of movies and the quality of the video is questionable compared to actual DVDs, though, and he recently stopped using the service.

“It seems like they are lowering the quality but keeping the prices the same,” Walkenhorst said. “That’s a bad business idea.”

Kevin Cady, a freshman in the College of Arts & Sciences, said he would continue to use Netflix to stream videos despite the price increase.

“It’s still much more convenient to get it on your computer or Xbox streaming than to order videos through the mail,” Cady said.

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