Netflix CEO Reed Hastings just announced in a blog post that Netflix is splitting into two companies. Netflix itself will be streaming-only (no DVD rentals), while Qwikster (which is a lame and difficult-to-spell name) will be the online DVD rental service. But this is an Amazon blog, so the question is… What does this splintering mean for Amazon’s Instant Video streaming services?
Well, there are a lot of angry Netflix customers making their thoughts known over in the comments on that Netflix blog post and over at the TechCrunch blog post (which also gives a good overview of why Netflix is doing this, which is a bit beyond the scale of this blog and post) on the topic). People are pissed that they’ll now have to have two separate subscriptions from two separate companies, in addition to paying more for both services. People are NOT happy with Netflix right now.
I personally cancelled my Netflix subscription a couple months ago when they announced the price hike. It wasn’t the extra money that got me, it was the principal of the thing. To me, Netflix was a luxury, not a necessity, and I didn’t like the way Netflix was treating its customers. So I quit. Right after I cancelled my Netflix subscription, I got an Amazon Prime subscription, which gives you access to a couple thousand streaming movies and TV shows in addition to free 2 day shipping on tons of products on Amazon.com.
With this Netflix announcement, I think there will be more people jumping ship from Netflix to Hulu Plus and Amazon Prime, the two other big streaming video sources online. In fact, a commenter had this to say on the TechCrunch post:
As for myself, I liked having the option of getting a DVD of something that wasn’t available as instant play. But now if it’s not available on Netflix, I’ll just rent it from Amazon Instant Video, another streaming solution.
Good news for Amazon.
As I write this, it’s Sunday night at about 11:30. It’ll be interesting to see not only how Netflix stock reacts to the news (it’s been in free-fall recently), but whether Amazon stock goes up. I’m guessing it will. Stay tuned.