NETFLIX DROPS PLANS FOR QWIKSTER

Bowing to an outcry from its customers, Netflix is dropping a plan to spin off its DVD service into a new company called Qwikster, the New York Times reported Monday.
In an interview with Brian Stelter, who writes the newspapers Media Decoder blog, Netflix spokesman Steve Swasey said, "We underestimated the appeal of the single web site and a single service.”
"We greatly underestimated it," he said.

Netflix CEO Reed Hastings declined to be interviewed by the Times, but he said in a statement: “Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”
Later, the company posted a blog confirming the news. "This means no change: one website, one account, one password… in other words, no Qwikster," the blog said.

NETFLIX SPINS OF DVD BUSINESS TO QWIKSTER

Over on Netflix's official blog, company head Reed Hastings has announced in a surprisingly humble blog post and video (see below) that it's splitting the DVD-by-mail business away into a new venture dubbed Qwikster (horrible name that conjures up the Amway site Quixtar). While the recent price changes already split the cost for each service, when this takes effect in a few weeks it will result in two different websites, two different sets of movie ratings and queues, and two different charges on customer's bills. Reed admits two separate sites may make it more difficult to manage a presence on both, but says dropping the need for compatibility between the two will enable new features to balance that out (huh?). The familiar red envelopes will remain, however they will now sport the new Qwikster (ugh!) logo.

In other news, Netflix Qwikster (god, I hate that name) is getting into video game rentals, available for an extra charge similar to the existing Blu-ray disc option.

NETFLIX THE LARGEST SOURCE OF INTERNET TRAFFIC IN US

Netflix video streaming is now the single largest source of peak downstream Internet traffic in the U.S., according to a new report by Sandvine. The streaming video service now accounts for 29.7 percent of peak downstream traffic, up from 21 percent last fall.

That puts Netflix above HTTP websites (18 percent), BitTorrent (11 percent), and YouTube (10 percent) as a source of downstream traffic during peak times in North America. (BitTorrent still accounts for half of all upstream traffic). As whole, “real-time entertainment” (which is mostly video streaming, but also includes streaming music) accounted for 49 percent of downstream traffic in March, 2011, versus 19 percent for P2P file sharing, and 17 percent for Web browsing.

Video files are so big that it does not take much usage for it to take over in terms of bandwidth consumed. But these numbers definitely point to a future where video accounts for more and more of the traffic on the Internet. As recently as last November, Web video alone accounted for an estimated 37 percent of Internet traffic.

But as Netflix CEO Reed Hastings points out, bandwidth to the home keeps increasing along with demand—he expects a gigabit to the home to be commonplace within ten years. As he told me earlier this month, “streaming is the core of our business,” but he also points out in the video below that most of the video to the home is cached on the edge of the network rather than going through the backbone.

NETFLIX HIRING FOR INTERNATIONAL GROWTH

Netflix's customer service call center in Hillsboro Oregon is gearing up to expand its scope of operations beyond North America. Two new job postings for a Training Supervisor and Quality Assurance Analyst both mention the need to prepare for "rapid" international expansion and "will support a specific country / region outside of North America." The Training Supervisor is being hired specifically to educate customer service reps in preparation for that future international growth. Neflix is looking for fluency in English in addition to Dutch, French, German, Italian, Japanese, Korean, Portuguese (Brazilian and European), and Spanish (Latin American and European), leaving things pretty wide open with regard to the countries targeted for initial launch.

In January 2010 CEO Reed Hastings stated "the big market for Hollywood content (after the U.S.) is Europe...Third is Asia. Fourth is the rest of the world."