Netflix: How to completely screw up

DVDs-by-email success story is losing customers...


As recently as June, Netflix looked like one of the biggest consumer success stories in digital media. The company was already synonymous with DVDs-by-email, an idea imitated worldwide, and was bundling on-demand TV and movie streaming at an incredibly low price. By May, Netflix traffic had overtaken Bittorrent volumes in the USA. accounting for a quarter of US IP packets. After years of prattle, somebody had persuaded the mass market to pay for video on demand over the internet.

Netflix even announced a move into financing original drama – buying the rights to the UK political thriller House of Cards.

Then Netflix decided to unbundle its bundle – hiking prices 60 per cent. What previously cost $9.99 (for most new users this was presented as $7.99 for streaming plus $2 for the DVD option) now cost $16. Compared to physically renting discs from Blockbuster this is still a bargain, and Netflix's catalog is still far superior to the chainstore. but the size of the price hike stunned customers. Netflix's growth has flattened, and the company admitted last week that it was revising subscriber numbers downwards. Shares have fallen 45 per cent.

But it's the breaking of the bundle that is hard to fathom. Netflix not only said it would be presenting its customers with two plans, it would separate the two businesses. This weekend CEO Reed Hastings issued a grovelling apology.

"We lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology," he wrote.

But Hastings also announced that the strategy would continue unchanged. The DVD business will be rebranded with a forgettable new name: Qwikster. Netflix and Qwikster sites aren't integrated, so if you can't find a movie to watch on streaming you have to search all over again for the DVD. If you rate a DVD, the rating will register on Qwikster, but not Netflix. And vice versa.

While it succeeds in signalling to the investors Netflix determination to make streaming its core business, the consequences of confusing and alienating customers may be high. What made Netflix feel attractive was price and choice - but also the bundle. If felt like a bargain. Now it feels like a curse.

Hollywood's ambitious idea – and Netflix is a supporter and member – is to sell licences rather than one-time admission fees to a stream, or plastic discs. For an UltraViolet member, it doesn't really matter. You'll buy a Blu-Ray disc and never take it out of its box – watching it through UV-compatible TVs.

It's potentially a huge, and positive change in the way we get stuff. But it's utterly mystifying to see NetFlix getting ready for this by irritating its customers, and making them painfully aware of the annoyances of digital media.

Is there some masterplan here we've missed? ®


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Chip-busting boffins in America have devised yet another way to filch sensitive data by exploiting Intel's processor design choices.

Doctoral student Riccardo Paccagnella, master's student Licheng Luo, and assistant professor Christopher Fletcher, all from the University of Illinois at Urbana-Champaign, delved into the way CPU ring interconnects work, and found they can be abused for side-channel attacks. The upshot is that one application can infer another application's private memory and snoop on the user's key presses.

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SolarWinds just keeps getting worse: New strain of backdoor malware found in probe

Plus: McAfee's in serious trouble over claimed cryptocurrency scam

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The strain, identified as SUNSHUTTLE by FireEye, is a second-stage backdoor written in Go which uses HTTPS to communicate with a command-and-control server for data exfiltration, adding new code as needed. Someone based in the US, perhaps at an infected organization, uploaded the malware to a public malware repository in August last year for analysis, well before the cyber-spying campaign became public.

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Linus Torvalds issues early Linux Kernel update to fix swapfile SNAFU

‘Subtle and very nasty bug’ meant 5.12 rc1 could trash entire filesystems

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Remember that day in March 2020 when you were asked to get the business working from home – tomorrow, if possible? Here's how that worked out

IT pros from orgs large and small tell The Reg the tech delivered, mostly, but couriers and home Wi-Fi suddenly became your problem

Covid Logfile Brianna Haley was given one day to be ready to roll out Zoom for 13,000 users at over 1,000 sites.

Haley* is a project analyst for a large healthcare provider that, as COVID-19 marched across the world in March 2020, realised imminent lockdowns meant it would soon be unable to consult with patients.

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The torture garden of Microsoft Exchange: Grant us the serenity to accept what they cannot EOL

Time to fix those legacy evils, though.... right?

Column It is the monster which corrupts all it touches. It is an energy-sucking vampire that thrives on the pain it promotes. It cannot be killed, but grows afresh as each manifestation outdoes the last in awfulness and horror. It is Microsoft Exchange and its drooling minion, Outlook.

Let us start with the most numerous of its victims, the end users. Chances are, you are one. You may be numbed by lifelong exposure, your pain receptors and critical faculties burned out though years of corrosion. You might be like me, an habitual avoider whose work requirements periodically force its tentacles back in through the orifices.

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Just when you thought it was safe to enjoy a beer: Beware the downloaded patch applied in haste

Let us tell you a tale of the Mailman's Apprentice

Who, Me? The weekend is over and Monday is here. Celebrate your IT prowess with another there-but-for-the-grace confession from the Who, Me? archives.

Our tale, from a reader the Regomiser has elected to dub "Simon", takes us back to the early part of this century and to an anonymous antipodean institution of learning.

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US National Security Council urges review of Exchange Servers in wake of Hafnium attack

Don't just patch, check for p0wnage, says top natsec team

The Biden administration has urged users of Microsoft's Exchange mail and messaging server to ensure they have not fallen victim to the recently-detected "Hafnium" attack on Exchange Server that Microsoft says originated in China.

Microsoft revealed the attack last week and released Exchange security updates.

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Delayed, overbudget and broken. Of course Microsoft's finest would be found in NASA's Orion

In Space No One Can Hear You Scream (as Windows crashes again)

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Spotted by Register reader Scott during a visit to the otherwise excellent Space Center Houston, there is something all too real lurking within the mock-up of the Orion capsule in which NASA hopes to send its astronauts for jaunts beyond low Earth orbit.

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NASA shows Mars that humans can drive a remote control space tank at .01 km/h

Perseverance takes first drive around landing spot named in honor of seminal sci-fi author Octavia E. Butler

NASA’s Perseverance rover trekked across Mars for the first time last Thursday, March 4, 2021.

The vehicle went four whole meters forward, turned 150 degrees to the left, then moved another two-and-a-half meters. The entire drive covered a whopping 6.5 m (21.3 feet) across Martian terrain. The journey took about 33 minutes.

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University of the Highlands and Islands shuts down campuses as it deals with 'ongoing cyber incident'

Ten letters, starts with R, ends with E, three syllables

The University of the Highlands and Islands (UHI) in Scotland is fending off "an ongoing cyber incident" that has shut down its campuses.

In a message to students and staff yesterday afternoon, the institution, which spans 13 locations across the northernmost part of the UK, warned that "most services" – including its Brightspace virtual learning environment – were affected.

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