Video services

Netflix Kills Qwikster

It’s a new world of cable news in today’s Columbus Day roundup.

  • Well, that was qwik. Netflix is dropping plans to separate DVD subscriptions from its online video streaming business. According to the Netflix blog, "This means no change: one website, one account, one password… in other words, no Qwikster." (See Netflix Gets Spoofed, Netflix Sinks to a New Low , Netflix Does the Splits and @Qwikster Takes a Hit .)

  • The Cinemark movie chain is threatening to pull the upcoming film Tower Heist from its theater locations if Universal follows through with a plan to offer the movie to on-demand subscribers just 21 days after opening. The response came quickly after Universal's announcement last week that it would bring Tower Heist to select cable VoD subscribers for the hefty price of US$60 while the movie is still in theaters. DirecTV's similar attempt to narrow movie release windows at a cost of $30 to premium subscribers has met with a lackluster response.

  • AT&T U-verse subscribers will get a chance to access the Xbox interface update planned for this fall if they use the console as a TV set-top. The update includes support for integrated search and new Kinect-based voice and gesture control features. However, subscribers will also have to pay for an Xbox Live Gold subscription in order to watch premium content like HBO Go. AT&T is throwing in a one-time $60 credit to existing U-verse Xbox customers who want to upgrade to the Gold tier. (See Comcast, Verizon Connect With the Xbox 360, and Xbox 360 Joins the U-verse Lineup .)

  • The new TiVo Premiere Elite hardware hit the stores this weekend, packed with four tuners and 2TB of storage. The DVR set-top is only made for use with a cable subscription (get your CableCARD ready), and will set consumers back $500 plus a $20 monthly fee. Dave Zatz reports that, as of Saturday, the TiVo Premier Elite was available in Best Buy Magnolia locations. It's now up on BestBuy.com in time for Columbus Day shoppers. (See TiVo Launches High-End DVR.)

  • There’s more box news too with word that the folks at DBSTalk have gotten their hands on DirecTV's next-gen DVR hub, the HR34-700 Home Media Center. It's in very limited release for consumers, but the set-top promises five tuners and one terabyte of storage. It's also RVU-ready, meaning subscribers in the future will be able to watch DirecTV content on TVs without a DirecTV receiver. [Ed. Note: RVU is pronounced "R-View" and apparently is not an acronym for anything. Thanks, pay-TV industry. The world wasn't confusing enough already.] (See DirecTV Tests RVU.)

    — Mari Silbey, Special to Light Reading Cable

  • AESerm 12/5/2012 | 4:51:35 PM
    re: Netflix Kills Qwikster

    So looks like Cinemark finds the idea of a neighborhood home movie theatre--however few people take the early windowed $60 offer--too competitively close for comfort. As for NFLX, Quik indeed. Someone must be writing this up as a business school case even as we type.

    DCITDave 12/5/2012 | 4:51:34 PM
    re: Netflix Kills Qwikster

    Yes, exactly. And though the $60 price point is insane, a slightly lower price point for VoD that was still more expensive than going to the movies would SEEM like the right way to get more eyeballs. Weird that Cinemark would have an issue with that.

    AESerm 12/5/2012 | 4:51:34 PM
    re: Netflix Kills Qwikster

    It's also about maximing revenues, right? So the right number of people viewing the title across the various windows.

    DCITDave 12/5/2012 | 4:51:34 PM
    re: Netflix Kills Qwikster

    Good point -- At $60, it's hard to argue that Cinemark had anything to fear from the VoD offer. And isn't the whole point of making a movie to try and get as many to see it as possible? How does shutting down potential distribution help that cause?


    shygye75 12/5/2012 | 4:51:34 PM
    re: Netflix Kills Qwikster

    Cinemark runs movie houses and has no interest in expanding the number of eyeballs beyond the ones paying their way into its theaters. Companies like Cinemark are threatened with disintermediation or at least even further erosion of revenues, and their real-estate overhead is substantial.

    BigBro 12/5/2012 | 4:51:33 PM
    re: Netflix Kills Qwikster

    The theaters don't make much money on ticket sales, especially in the early weeks. They make most of their money selling pop corn and soda. (See link below.)

    So shortening the window during which people might go to the theater to see the movie is an existential threat to theater operators.

    $60 is just the studio's initial guess at pricing, and they're obviously starting high, looking to titrate in the right price by gradually lowering it to the point where people go for it.

    If/when they figure out the right price, and they manage to get viewers in later weeks to not go to the theater, the studios cut off what little ticket revenues the theaters have. This is why the theaters are fighting back so hard: they've got to nip this in the bud.


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