Netflix CEO Reed Hastings explains that the company’s decision to separate its DVD and video streaming services is because the DVD business will become Qwikster. Hastings writes that his company “realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently.”
Customers who get get DVDs in the mail will soon receive separate bills from the Netflix-owned subsidiary.
On the company’s weblog, Hastings goes on to admit he did a poor job communicating recent changes to his customers:
When Netflix is evolving rapidly, however, I need to be extra-communicative. This is the key thing I got wrong.
In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication. Inside Netflix I say, “Actions speak louder than words,” and we should just keep improving our service.
But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.
“Netflix Separates DVD and Streaming Services”
Technology 16 Sep 2011 09:03 am
Disappointing sales (only 200,000) of the PlayBook and tough competition with Android phones in the consumer market resulted in lower than expect earnings for RIM:
RIM said Thursday that its net income was $419 million, or 80 cents per share, in the three months ended Aug. 27. That’s down from $796.7 million, or $1.46 per share, a year ago. Analysts expected 90 cents per share, according to a survey by FactSet.
The company, based in Waterloo, Ontario, said revenue fell 15 percent to $4.2 billion.
Shares hit a fresh new five-year low, falling $5.74, or 19.4 percent, to $23.80 in after-hours trading. RIM’s stock has lost more than half its value this year.
“Phone Rivalry Drives Down RIM Earnings“
Technology 04 May 2007 01:04 pm
Microsoft wants to be a bigger fish in the large, online sea. Google has been trouncing them on search and subsequently on online advertising. Google is now moving into the relm of business software, a Microsoft cash cow. The New York Post reports Bill Gates and the gang have had enough and want to buy Yahoo:
While Microsoft and Yahoo! have held informal deal talks over the years, sources say the latest approach signals an urgency on Microsoft’s part that has up until now been lacking. Now, Microsoft shows fear.
The new approach follows an offer Microsoft made to acquire Yahoo! a few months ago, sources said. But Yahoo! spurned the advances of the Redmond, Wash.-based software giant. Wall Street sources put a roughly $50 billion price tag on Yahoo!.
“They’re getting tired of being left at the altar,” said one banking source who has recently had talks with Microsoft. “They now seem more willing to extend themselves via a transaction to get into the game.”
Microsoft spending $50 billion would be unprecedented for the company. They’ve been sitting on billions in cash for years. It put fear in their competitors until Google started reeling in the billions.
Gary Sattler at Bloggingstocks.com is ripping the Redmond giant:
My interpretation of Microsoft’s subliminal message here is that it couldn’t win the game so it’s going to pay the crippled kid down the street to come play with it. The only problem here is that the crippled kid isn’t all too interested in playing, and Microsoft doesn’t even seem to realize that it’s a cripple.
TechCrunch’s Duncan Riley observes, “It certainly is a strange time when Microsoft accuses Google of anti-competitive behaviour one day, then activily seeks to acquire a leading competitor for the sole purpose of trying to compete with Mountain View based uber company the next.”
Technology 23 Feb 2007 07:30 pm
Apple (APPL) and Cisco (CSCO) decided spending oodles on lawsuits would get in the way of making better tech. So they agreed to share the iPhone name and “will explore opportunities for interoperability in the areas of security, and consumer and enterprise communications.” Isn’t that what Cisco wanted? So Steve Jobs caves, right? Maybe, but he wins in the end. Look at the two iPhones. Which one would you buy? Sleek and sexy versus a 1993 remote control. And how are you going to watch a movie on Cisco’s gadget?
Technology 21 Feb 2007 07:43 am
London is hot in the tech world again. It’s so hot it’s called “London 2.0.” To me that sounds like the local visitors bureau trying to sound too hip. Still, London is hosting the Future of Web Apps conference this week featuring Digg’s Kevin Rose and Michael Arrington of TechCrunch. There’s fire to that heat.
Technology 14 Feb 2007 11:14 pm
During the Christmas shopping season it was understandable to have trouble finding a Nintendo Wii. It was brand new, had a cult gamer following, looks fun to play, and even the best companies have trouble making enough product to meet huge early demand. We’re now a few months after the Wii’s debut and people are still having trouble finding the machine.
First, Faisal Laljee at SeekingAlpha:
I visited no less than 6 stores on Monday night – EB Games, GameStop (GME), Best Buy (BBY) and Target (TGT). None of them had the Wii in stock. I spoke to one of the employees at GameStop and he told me that they get Wii shipments from time to time, but the units sell within minutes. Talk about demand.
Next, Eric Savitz at Barrons.com:
I was looking for an excuse to rant about my Nintendo Wii shopping experiences and now I have one. In that note I just mentioned from Citigroup’s Bill Sims about a walk-through of a Best Buy (BBY) store in Orlando, the analyst mentions that due to huge demand for the Nintendo Wii, the retailer is “struggling to keep them in stock.”
Yeah, I’ll say.
He found one for an inflated price on Craig’s List.
In contrast Laljee said a GameStop employee informed him Playstation 3 machines were “stacked up in the back.” Don’t feel too sorry for Sony they’re getting record pre-orders in the U.K. Let’s see if they can deliver.
Technology 13 Feb 2007 07:39 am
When we think of Google (GOOG) we think of super-fast web searches, internet advertising, and a business culture that views itself as different from the rest of the industry. What’s happening in North Carolina takes some luster off the benevolent image of the “Do no evil” company. Nicholas Carr has put together two link-filled posts that detail Google’s work with state and local officials to get land and tax breaks for building a facility employing 200 people. After reading them Google looks like any other company only a stock market and technology darling.
What does Wal-Mart (WMT) have against Firefox? I showed earlier their new movie download service on the open-source browser looks like something produced by an IBM Selectric on LSD. It looks just as bad on Firefox on the Mac. (The comparison is better understood if you are on LSD as well or weed.) At first look I figured it was just a glich–a HUGE glich–with the Wal-Mart beta. But the retailer has had all day to fix it. Nothing’s happened. Michael Arrington quotes a web designer, “I could fix this in 30 seconds. Did they even test this in Firefox before launching?”
To appreciate Wal-Mart’s efforts you need to fire up Microsoft Internet Explorer. With it the movie download sight looks like, well, the Wal-Mart website.
One of TechCrunch’s commenter told Firefox users to do a hard refresh of the web page (shift-control-R). That does the trick, but Wal-Mart’s had all day to fix this. At the least they could put up a redirect to a page saying the beta site works only with Internet Explorer. A Google beta this is not.
Gizmodo questioned Wal-Mart about the service. The company emphasised the service is a beta and it’s a chance for them to feel things out at the beginning of a downloadable media world.
So what does Wal-Mart have against Firefox? Nothing. Things are just a work in progress.
Wal-Mart’s new endeavor gets an Om Malik beating calling it another in a long line of “too many me-too download services out there, muddying the waters and confusing the consumers about which movie or television they can download from where, and why.” Om thinks the winner won’t be Wal-Mart shareholders by Steve Jobs.
IDG News gives us the techy scoop on how and who brought the movie download site to life:
The offering is built on HP Video Merchant Services, a Web-shopping technology also launched Tuesday that allows businesses to set up an online video store. HP holds hundreds of petabytes of digital films and TV shows in its data centers, and provides back-office sales and search applications, said Willem de Zoete, vice president and general manager of Digital Entertainment Services at HP.
Customers like Wal-Mart use the service as part of their online retail offerings, allowing cinema fans to browse movies based on genre, or search by entering the name of an actor, director or film. Customers can then download the movies to play on their PCs or portable video players, or order a packaged disc to arrive in the mail, choosing a DVD, HD-DVD or Blu-ray format.
A first-time user must install a program on the PC before starting the 30- to 45-minute process of downloading a 1.5G-byte movie over a typical household broadband connection, although most can start watching within five to 10 minutes, said Kevin Swint, Wal-Mart’s divisional merchandise manager for digital media.
I wonder how much of a turn-key system HP Video Merchant Services is. How easy would it be for this website to set up movie download service? Thousands of movie sites would be great for the movie studios and television networks. It wouldn’t be so good for Wal-Mart to have their competition only a click away.
[Button via James Kolbern.]
Technology 02 Feb 2007 05:00 am
comScore released some data on the world’s most popular web properties. Despite Google (GOOG) doing so many things right with so many services Microsoft (MSFT) still garnered the most visitors in 2006. World web use increased 9%, Google’s visitors grew 13% (with 71% rise in Gmail users), while Microsoft and Yahoo (YHOO) each grew 5%. Like Toyota’s inevitable climb to the top of the auto industry Google will soon be king of the web.
The biggest areas of growth were a combination of old and new with multimedia (YouTube grew 1972%!), community (think MySpace), and e-mail (again Gmail) topping the list.
Technology 01 Feb 2007 11:26 pm
It’s been a shaky few days for Dell Computer (DELL). First, a leadership shake-up brings Michael Dell back as CEO replacing Kevin Rollins. Now, an investor lawsuit contends Dell improperly accounted for rebates from Intel (INTC):
The suit alleges that Dell received at times as much as $1 billion a year in “secret and likely illegal” kickbacks in the form of “e-Cap” or “exception to corporate average pricing” payments” from Intel to ensure that Dell used no other chip supplier, according to The Journal. Specifically, the complaint alleges that Dell received payments from Intel for not doing business with American Micro Device The Journal reported.
Intel must not have been paying enough. Dell started selling computers with AMD (AMD) chips last year.
While recent events have been a little unsettling The National Post’s Jonathan Ratner reports stock analysts welcome Michael Dell’s return to running his company. The hope is Windows Vista will boost corporate computer sales and Dell starts buying companies to boost profits.
The challenge for Dell (Michael and his company) is
its manufacturing prowess isn’t the edge it used to be. And Dell doesn’t spend enough on research and development to truly innovate. As a result, Dell is mired in a commodity hardware game. That game plan was fine when rivals were inefficient, but HP can now squeeze Dell on price.
Dell’s purchase of Alienware is a sign they know they need to inject a product innovation ethos. They have to project something other than a basic, dependable image. Right now they’re The Gap of the computer world. They’re bland yet dependable–I’d buy a Dell in heartbeat just like I’d go to The Gap for some t-shirts and khakis. Grabbing a few Apple (APPL) people would really shake things up on the consumer side. Or if they can’t convince anyone there to leave the Cult of Jobs they should look at Sony (SNE) people who make sexy Vaios. On the corporate end going more into services means taking on IBM (IBM).