Rebranding is hard.  It is expensive, and it often causes more heartache than it stops. Netflix renaming their DVD by mail service as Qwikster is no exception.

Netflix's Reasons

On the Netflix blog Reed Hastings posts:

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.

The strange thing is that their own internal numbers show that they are doing well in the streaming industry already. They are mailing out an all time high of DVDs, and streaming more and more content everyday.  So is their DVD busy really getting left behind? No. Is there streaming business struggling to get started, no, is it struggling to become awesome? No.

One thing that really stood out to my in his blog post as just plain silly was the comment:

We feel we need to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with our DVD by mail service.

I wasn't aware that setting up streaming technology would hinder the ability for the company to pack and mail DVDs. That is just an absurd wording to me.

Streaming Deals

Recently Netflix has lost their contract with Starz (a huge collection of their streaming content).  Honestly, I think the reason for the split is that Netflix is losing streaming deals left and right, and the reason is because of the DVD business. So if they separate the two companies they might be able to get more aggressive in their dealings with studios for rights to streaming.  Or possibly the other way around too, since their streaming and DVD businesses are in bed they can't find a way to fight through the 28 day window.

What's In a Name?

Qwikster is the name of the new Netflix spin off for DVDs, which doesn't really get the idea of what they do across. Not that Netflix screamed DVD rentals, but they got the name out there and branded it well. Infact I don't know many people who don't know what Netflix does from their name alone.

Qwikster was picked because:

We chose the name Qwikster because it refers to quick delivery.

Apparently "Quick Delievery" was already taken? What is quickly delivered exactly? Perhaps instead of remaining in the DVD Rental business they are going to starting doing miscellaneous deliveries. Taking on UPS and FedEx maybe?

Poor choice in names, and explanations of the name.

What's Next?

Reed has already posted to the word his intentions. So I guess we will have to sit back and watch what happens, but I think we will see more confusion and less movement forward from both sides of Netflix is the short term. They are going to have to scramble even more than they already are to retain customers and to grow business.

Their next steps need to be to improving streaming quality and their streaming catalog. They need to take on Blockbuster and get their 28 day window removed.

Good Luck Reed, Good Luck Qwikster.

 

Update: I told you!