Why did Netflix spin-off it’s DVD service?

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Netflix has been under fire since they raised their prices. So much fire that people have been unsubscribing and their stock price absolutely tanked.

And now Netflix has spun off it’s DVD service and is going all streaming, all the time. DVDs will be handled by Qwikster. Don’t be surprised if Netflix sells off Qwikster, just by the way.

This is not a move to make your life easy. It’s not a move to increase subscribers. It’s a move made to try to survive.

When Netflix was all DVDs they didn’t have to answer to the studios. They could just buy DVDs and rent them out, never having to worry about anything.

Then streaming came along and they were able to pull off some content deals for cheap and easily. Now people love streaming and studios have realized its value. So the price goes up.

That leaves us where we are now. Netflix’s DVD service is holding the company back. Netflix was negotiating streaming deals based on the number of subscribers they had. Basically, the more subscribers Netflix has the more money it costs them for streaming rights.

When negotiating, studios often include people who subscribe just to the DVD part of the service and don’t actually watch anything via streaming. Netflix argues that’s not fair, studios say tough luck.

So now, they’re separate. Now Netflix has a little leg and can get some content for cheaper.

For Netflix to survive and give you the great service you love they need to focus on streaming along. Yes, it’s an inconvenience to manage two separate queues and billing and ratings and all that. It’s a goddamned headache that I’m not looking forward to at all.

Remember, Netflix was practically giving away streaming for free with their DVD service for the longest time, when the DVD service is much easier to handle than their streaming service.

I’m not saying Netflix is scotch-free of all guilt. They did a terrible job of explaining the price hikes and could be explaining the spin-off much better as well. But this is a tiny bit bigger than their customer’s convenience. It’s the company’s survival and the precursor to a world where home entertainment is completely on demand.

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