The CEO of Netflix, Reed Hastings, just penned a blog post combining an apology for how they handled recent price increases and an announcement of a new company spinoff, “Quickster”, which will handle the DVD-by-mail service. The idea is that Netflix focuses on streaming and Quickster focuses on DVD by mail.
I know a lot of people are upset about the price increase (if you did both streaming and dvd by mail you will now pay more for what you used to get) but IMO Reed did the right thing. Why? He is absolutely correct that companies rarely if ever transition from one paradigm to another. For example, IBM did not successfully transition to the PC market (they no longer produce PCs) and traditional newsprint companies are struggling to succeed in the online world. The best example of all, Blockbuster, is struggling to stay out of bankruptcy.
Why do companies fail to make the transition? Because they must “eat their own children” i.e. they must sacrifice their existing customer base in order to grow the new one. And as you might guess, nobody likes eating their own children (ETOC).
Netflix is at a point where they must either ETOC, fail like the rest, or spin off the old business. Spinning off the DVD business makes the most sense to me. Quickster now gets to compete in the DVD market where it will experience a slow and gradual decline while Netflix can really focus on the exploding streaming business. What will be particularly interesting is that as these two companies further separate themselves, will Netflix have the courage to “take out” Quickster like they would want to eliminate Blockbuster?
That will be the moment of truth for Netflix. We’ll see if they will be willing to “eat their previous offspring” or not.
What do you think about the spinoff? Lets try to keep the comments off the rate increase as I would agree nobody would support it and there’s no point in ranting about something we all agree on (we don’t like rate increases!). I’d like to get some feedback on what you think about the business concept of spinning off Quickster vs. keeping it within Netflix.
Why do we use so LITTLE styrof…
/in tweetsWhy do we use so LITTLE styrofoam? RT @CivilBeat So – Why Do We Use So Much Styrofoam In Hawaii? http://ow.ly/6DWi6 #becivil
anybody affected by an east hn…
/in tweetsanybody affected by an east hnl power outage?
Check out today’s interactive …
/in tweetsCheck out today’s interactive google doodle honoring Jim Henson’s muppets! http://t.co/C4NOkWNY
Did you get fooled by the iphone 5 hoax?
/in Neat Tech & NewsSummary: If you get an email about something that’s too good to be true, always Google it with the word “hoax” appended. You’ll be amazed to find out that Elvis has indeed passed away and aliens have not in fact invaded the president’s brain.
Today I got an email from a family member asking me about whether she should buy the iphone 5. I asked her why and she loved the idea of the “holographic keyboard”. Huh? Suddenly I thought perhaps I was getting out-geeked by family members learning about new features before I did. Say it isn’t so! Apple is usually very secretive about future iPhone Pheatures and other than guessing what’s next by analyzing Chinese case manufacturer designs, we’re pretty much in the dark until the very end.
Quick searches (“iphone 5 hoax”) landed me to this now-famous (21 million views!) YouTube which shows an incredibly impressive demonstration of the (now watch the wording here) “iPhone 5 Concept Features”.
Yes, it’s a hoax. Sorta. It’s actually a brilliant marketing play by Aatma Studios on a “concept” with “our vision of key features” that an iPhone 5 or “subsequent models” could have
In other words, this is vaporware. Doesn’t exist. My recommendation is that you wait until after the formal launch to decide if iPHone5 is right for you.
Just me or is @starbucks becom…
/in tweetsJust me or is @starbucks becoming the choice for bums on the street to suck up resources and chase out good customers?
Cloud Computing is not just a tech trend. It’s a lifestyle movement.
/in Business, Cloud Computing, visionI was honored by mention in a Hawaii Business article on cloud computing and am especially happy about what I was quoted on:
There’s a lot more to expand on and I took this opportunity to do so.
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Will you watch Xbox TV this Christmas?
/in Neat Tech & NewsHeavy Xbox users won’t be surprised to find out that Microsoft will be expanding functionality with “Xbox TV” this Christmas (2011).
Xbox users can already rent movies and watch Netflix and Hulu Plus. It will be interesting to see how they will further their penetration into this space which has been traditionally dominated by cable companies. (Disclosure: Oceanic Time Warner Cable sponsors my Your Computer Minute vignette on the radio). Can Microsoft provide a better set-top box experience? What happens when the world’s largest software company connects the Web to TV programming on its existing installed base of 55 million devices and 35 million paying subscribers?
We’re about to find out. What do you think?
How do you feel about Netflix spinning off DVD service?
/in Neat Tech & NewsThe CEO of Netflix, Reed Hastings, just penned a blog post combining an apology for how they handled recent price increases and an announcement of a new company spinoff, “Quickster”, which will handle the DVD-by-mail service. The idea is that Netflix focuses on streaming and Quickster focuses on DVD by mail.
I know a lot of people are upset about the price increase (if you did both streaming and dvd by mail you will now pay more for what you used to get) but IMO Reed did the right thing. Why? He is absolutely correct that companies rarely if ever transition from one paradigm to another. For example, IBM did not successfully transition to the PC market (they no longer produce PCs) and traditional newsprint companies are struggling to succeed in the online world. The best example of all, Blockbuster, is struggling to stay out of bankruptcy.
Why do companies fail to make the transition? Because they must “eat their own children” i.e. they must sacrifice their existing customer base in order to grow the new one. And as you might guess, nobody likes eating their own children (ETOC).
Netflix is at a point where they must either ETOC, fail like the rest, or spin off the old business. Spinning off the DVD business makes the most sense to me. Quickster now gets to compete in the DVD market where it will experience a slow and gradual decline while Netflix can really focus on the exploding streaming business. What will be particularly interesting is that as these two companies further separate themselves, will Netflix have the courage to “take out” Quickster like they would want to eliminate Blockbuster?
That will be the moment of truth for Netflix. We’ll see if they will be willing to “eat their previous offspring” or not.
What do you think about the spinoff? Lets try to keep the comments off the rate increase as I would agree nobody would support it and there’s no point in ranting about something we all agree on (we don’t like rate increases!). I’d like to get some feedback on what you think about the business concept of spinning off Quickster vs. keeping it within Netflix.
Google Apps Hawaii Users: Better Syncing with Outlook
/in Business, Cloud Computing, Google AppsIf you love Microsoft Outlook but want to try out Google Apps for Business, the best way to go is use the free Outlook Sync application that Google supplies. It lets you continue using Outlook but syncs your email, calendar, and notes with the Google servers.
It’s the perfect way to smoothly transition using Gmail to replace Outlook without having to go cold turkey. Let me give you my own story as an example:
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Heroku Now the Default Choice for Facebook Cloud Services
/in Social EnterpriseI think this is a pretty big deal for Heroku. To be the exclusive (for now) provider of “Cloud Services” for Facebook is going to give them a monster advantage. Now connect that to Salesforce’s database.com backend integration and you’ve got some serious potential horsepower to explode a whole new category of social enterprise applications that integrate your company’s backend with a Facebook frontend.
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