Damian Dovarganes / AP file

Redbox's kiosks are now the leading source of physical DVD rentals in the U.S., and video-on-demand accounts for one out of three paid movie rentals.

"Brick-and-mortar retail stores continue to cede movie-rental market share, as kiosks and digital-streaming rentals become more accepted by consumers," said The NPD Group Thursday.

"There's no doubt that Redbox has been the largest beneficiary of the collapsing brick-and-mortar store rental business, especially with ongoing Blockbuster store closings and the fact that there are also fewer independent stores than the prior year," said Russ Crupnick, senior vice president, industry analysis for The NPD Group, in a release.

Netflix remains the "dominant provider of paid digital movie rentals, posting a 55 percent share in the fourth quarter of 2011, though Netflix's share is down somewhat from the company's peak of 59 percent" in the second and third quarters of last year, according to the The NPD Group.

The research firm said U.S. consumer rental of movies in DVD and Blu-ray disc formats fell by 11 percent in 2011 from 2010. The leader for actual disc rentals was Redbox, which saw its unit volume up by 29 percent in 2011 over the year before.

Some consumers may have been driven to Redbox or video on demand after giving up on Netflix, whose price hikes last year angered consumers.

The company's "share erosion may have resulted from their recent well-publicized challenges with pricing, and from their now defunct Quikster (DVDs-only) experiment," Crupnick said. "However, they are in the process of shifting customers to their Watch Instantly option, so not all of the physical movie rental share drop is a net loss."

The movie rental market is "clearly undergoing a sea change, as consumers become better equipped to access on-demand and streamed movies and are more comfortable with available delivery options," he said. But, he added, "Even so, renting physical discs from now-ubiquitous kiosks in grocery stores and other venues has taken the lead as the most popular movie-rental method in the U.S."

"Now-ubiquitous" is right, for Redbox. You can't, it seems, go a block or past a grocery store or drugstore without finding the red kiosks, almost as prevalent as Starbucks. One down side is that when you're at the kiosk, if something goes wrong during the purchase process, you can be stuck (despite an 800 number to call that often results in a long, long wait) — something you don't want to do standing near a parking lot.

Related stories:

• Netflix drops in customer satisfaction
• Netflix to split DVD and streaming services
• Is Qwikster quicksand for Netflix?
• Outrage over Netflix rate hike continues

Check out Technolog, Gadgetbox, Digital Life and In-Game on Facebook, and on Twitter, follow Suzanne Choney.

Sony

When Sony's PlayStation Vita goes on sale in the U.S. Feb. 22, it will have Netflix on board so users of the subscription service can start watching movies on Vita's 5-inch OLED display.

At the Consumer Electronics Show in Las Vegas, Sony said its new portable handheld game machine, which went on sale in Japan last month, sold more than a half-million units as of Jan. 5.

In the U.S., the Vita will run $250 for the Wi-Fi only model and $300 for the 3G/Wi-Fi model. AT&T said Monday Vita owners who use the carrier's 3G service can choose no-contract options of  $14.99 a month for 250MB, and $25 for 2GB.

The Netflix news is good for Sony and may be for helpful to Netflix as well. After a tough 2011 of PR gaffes and customer ire over price hikes, the company said it ended September with 23.8 million U.S. subscribers, down about 800,000 from June.

Related stories:

• Japanese Vita sales continue post-launch decline
• Vita beats 3DS in battery life test
• PlayStation Vita portable starts strong in Japan

Check out Technolog, Gadgetbox, Digital Life and In-Game on Facebook, and on Twitter, follow Suzanne Choney. 

Sandvine, Inc.

Netflix consumes 32.7 percent of the Internet's peak downstream traffic in North America, and "continues to be the most powerful driver of evening traffic, and for that matter, of daily traffic overall." 

Sandvine, Inc., which makes equipment used by cable and phone companies to manage their Internet systems, also says in a new report that despite "some negative subscriber reaction to price hikes, Netflix has continued to increase its presence by adding 1 million U.S. subscribers since the Spring 2011 report, and by many measures Netflix rules North America’s fixed access networks."

Earlier this week, Netflix said it ended September with 23.8 million U.S. subscribers, down about 800,000 from June.

Has Netflix peaked, and hence its Internet traffic, too?

In its "Global Internet Phenomena Report," Sandvine raises the question itself:

... has Netflix traffic reached a maximum as a share of total Internet traffic in the United States? With so many Netflix-capable devices, the addressable market for the service is already enormous and will only increase, so it’s hard to envision a scenario in which absolute levels of Netflix will decline. However, Netflix is facing increased local competition, and as a result new services might grow at a faster rate.

Globally, Netflix will grow — the service is available in almost 50 countries and the company is aggressively pursuing licensing deals with locally-focused content — but in the United States specifically, we might have seen the peak.

Last year, both Web surfing and peer-to-peer file sharing — mainly the illegal trading of copyrighted movies — were each larger than Netflix's traffic," noted the Associated Press. But by last spring, Netflix exceeded both of those activities.

So for now, Netflix remains the 800-pound gorilla of the Internet. Sandvine says Netflix also accounts for:

• 29 percent of "peak period aggregate traffic" — HTTP (Web surfing) is second with 16.6 percent.
• 23.3 percent of "daily aggregate traffic"  — BitTorrent (peer-to-peer file sharing) is second with 16.5 percent.

Related stories:

• Netflix shares tank as customers leave service
• Is Qwikster quicksand for Netflix?
• Thousands threaten to quit Netflix
• Netflix's Internet traffic overtakes Web surfing

Check out Technolog, Gadgetbox, Digital Life and In-Game on Facebook, and on Twitter, follow Suzanne Choney.

Strategic Name Development

Netflix' new name for its DVD rental-by-mail service is being received with mixed results (including the Twitter account holder who uses that name, a teen). Brand-naming company Strategic Name Development did some "qwik" research Monday, the day Qwikster was announced, interviewing 500 consumers.

"Perhaps due to its created and unusual spelling, more than a third of consumers view the Qwikster name as contemporary," said Strategic Name Development. "But more importantly, to the Qwikster's name detriment, an equal number (36 percent) consider the Qwikster name 'easily confused with similar names.' "

While 57 percent said they consider the name ideal for a "service that is faster than any other alternative," not everyone felt that way, including 11 percent who said Qwikster's a good handle for "a service that helps you hook-up with the opposite sex."

Here's some "representative" quotes gathered by the Minneapolis-based company:

Netflix / Qwikster

Reminds me of Napster and we all know what happened to them."

Sounds like the game site winster.com

You misspelled Twitter.

Makes me think of the Nestle chocolate drink.

Quixtar comes to mind.

Others said the name sounds just plain "tacky," "really corny" and "more like a children's toy."

Many felt that Netflix should have kept the Netflix name for its DVD service, and given Qwikster to the streaming service. The Qwikster name, said one, "... has nothing to do with the movies."

"They should have Flix in the name, Mailflix, Dvdflix," said another.

"Qwikster is so generic it could be anything and has no chance of becoming a household name," was yet another opinion.

Good points all. Still, it might be good to remember another fairly recent product that was introduced with an almost-odious name. It was called the iPad, and seems to have done fine. 

Related stories:

• Why Netflix is splitting itself in two: A comic
• Twitter's Qwikster gets offers, trusts no one
• Uh oh! Netflix doesn't own the @Qwikster Twitter account
• Is Qwikster quicksand for Netflix?
• Netflix ... er ... Qwikster adding video game rentals

Check out Technolog, Gadgetbox, Digital Life and In-Game on Facebook, and on Twitter, follow Suzanne Choney.

The Oatmeal

We know that Netflix has split its DVD-by-mail and video streaming businesses into two, but — despite the company's explanations — we're still scratching our heads about the whole thing. Why on earth did Netflix go through with this plan — and create a new service called Qwikster while at it?

Comic artist The Oatmeal would like to offer an answer — in a typically hilarious illustrated format.

The Oatmeal

The Oatmeal

The Oatmeal

Related stories:

• Uh oh! Netflix doesn't own the @Qwikster Twitter account
• Is Qwikster quicksand for Netflix?
• Netflix ... er ... Qwikster adding video game rentals

This comic is republished with permission from Matthew Inman aka "The Oatmeal," a web designer turned comic artist. You can see more of his work on The Oatmeal. Inman is a one-man operation, so be sure to check out posters and prints from his shop or order a copy of his hilarious book, "5 Very Good Reasons to Punch a Dolphin in the Mouth."

Netflix / Qwikster

Oops, Netflix has done it again.

If Netflix intended not to confuse people with its latest move to separate their DVD service and rename it Qwikster, then it's made another epic fail. Just as serious a blunder: further highlighting the inequity between its vast DVD selection and its less-than-impressive streaming choices, which may end up driving its 25 million-plus members elsewhere.

Netflix recently sent a letter to its shareholders bracing them to expect lower subscriber numbers on the DVD side, one million less than expectations projected over the summer. With this news, will Netflix finally lose whatever DVD loyalists it has retained?

There are already more than 10,000 comments on the blog announcing this latest move, and for the most part, it looks like Netflix has stumbled. Again.

Netflix

Reed Hastings, Netflix CEO

If you, like me, checked your email late last night before you went to bed, you would have gotten a sort-of mea culpa from Netflix's CEO, Reed Hastings, announcing the final break between the DVD and streaming plans into two different websites that began with this humbling passage:

Dear Athima,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt 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. Let me explain what we are doing.

And then from there, it goes all wrong. Again.

If you haven't canceled your DVD plan with Netflix, the envelopes will still continue to arrive in your mailbox. "For me the Netflix red envelope has always been a source of joy," wrote Hastings. "The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you."

Qwikster? What?

Did they not know, as everyone on the Internet quickly found out, that the Twitter handle for Qwikster has already been claimed by a stoner gamer? (More on that from msnbc.com's Rosa Golijan.)

But besides the ridiculous name (nothing is quicker than streaming, right?) and Twitter fiasco, this move may finally be the death knell to Netflix's waning public opinion, which began to slide this summer and expressed itself loudly on its Facebook page.  

While Netflix's DVD and streaming plans were under the same roof, the company could hide behind the smoke and mirrors of its ginormous DVD selection. Like Amazon, pretty much anything you could think of (to watch), was there. Even movies that haven't come out in theaters are listed for you to save for the future, and if you can't find it on-demand, you can opt for the DVD.

Being an early adopter who's been with Netflix since 2000, I knew their core strength was DVD. Even Hastings acknowledged that: "Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies."

But Hollywood has chipped away at the power of Netflix DVD. While the Netflix library of DVDs numbers in the millions, it is consistently compromised by delays imposed by Hollywood studios (such as the 28-day muzzle from Warner Brothers back in 2010). It's nearly impossible to get a DVD during the first week of release, while video-on-demand services — from the cable company, Apple's iTunes, Microsoft's Xbox and many, many other third parties — offer new releases instantly the same day as the DVD launch, for the same price we used to pay at the video store.

Meanwhile, those left behind on the streaming-only Netflix site will get a rude awakening, if they haven't already: There are almost no recent top-shelf movies.

Back in July, when Netflix made its ill-received decision to separate its DVD and streaming plans — and hike up prices 60 percent if you still wanted both — Steve Swasey, vice president of corporate communications for Netflix, told us streaming titles numbered about 20,000 a year ago, and while he wouldn't reveal how much they've added, he did say it was "more than you can watch in a lifetime."

Now, I'm ok with a lifetime that included TV shows like "Mad Men," "Damages," every "Star Trek" iteration and the "X-Files." But Starz, a major supplier of Netflix's on-demand film content, including Sony and Disney movies, has pulled out of its distribution deal with the company. In terms of movies, I don't think I could handle a lifetime of movies like "Saw: The Final Chapter," or "Curdled" or the thousands of other straight-to-streaming time eaters.

(Read msnbc.com's Wilson Rothman on how to tell if your Netflix instant queue is in trouble.)

Still, if you're listening to Hastings, all is great in the Netflix on-demand world:

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something — like AOL dialup or Borders bookstores — do not become great at new things people want (streaming for us).

So Netflix came to this conclusion:

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

Qwikster will be up and running soon. At least there won't any more pricing surprises, though your credit card will now have two entries for the dual services, if you receive both.

Yet the disruption is also a sign that there's no master plan over at Netflix HQ: If Netflix was always going to split off its DVD business, why did it make the price change first, then follow it sloppily two months later with this Qwikster offshoot? We'll be on the lookout for the company's third quarter report next month to see what kind of a blow moves like this have made on Netflix's once-loyal customer base.

More Netflix coverage from msnbc.com:

• Netflix to split DVD and streaming services
• Netflix exodus begins?
• Netflix: Our bad, you can stream to more than one device
• Is your Netflix queue in trouble?
• Report: 2 million+ subscribers will cancel Netflix
• Nielsen: Hulu users watch more TV than Netflix members
• Outrage over Netflix rate hike continues

Check out Technolog on Facebook, and on Twitter, follow Athima Chansanchai, who is also trying to keep her head above water in the Google+ stream.

Twitter

When the folks at Netflix decided to split up the DVD-by-mail and video streaming aspects of their business, they seem to have forgotten to do one tiny little thing: Check whether the Twitter account corresponding to their newly created service's name, Qwikster, was available.

Sure, this seems like a minor detail to fret about, but it can lead to quite a bit of confusion if overlooked. After all, don't you think that users of Netflix's spin-off service might wonder why messages from the @Qwikster Twitter account (warning: NSFW) have nothing to do with renting DVDs?

You see, that particular Twitter account currently appears to be owned by a fellow named Jason Castillo. And Mr. Castillo, a student, has interests revolving around girls, vulgarities and recreational drug use. (It's perhaps worth noting that his Twitter user icon is an image of Sesame Street character Elmo holding a marijuana joint.)

We're sure that Netflix will try to gain control of the @Qwikster account, but — if Business Insider's Alyson Shontell is correct — they may not have much luck:

While Netflix secured the Qwikster domain, there is no record of a trademark filing for "Qwikster." ... Unfortunately for Netflix, unless you own a trademark, you can't force a current tweeter to give up his or her handle. Twitter also doesn't let users buy handles from others.

Since Jason Castillo, the person who currently owns the Qwikster handle, is an active tweeter and hasn't impersonated the movie delivery company, Netflix may not be able to stop the high Elmo icon from tweeting raunchy status messages.

Of course, Netflix might just get lucky and be able to wait this one out because according to Castillo's first tweet, he created the @Qwikster Twitter account because he forgot the login credentials for his original one. With a little bit of luck, the absent-minded man will abandon this account for a few months and Netflix will be able to snatch it up thanks to Twitter's inactive account policy.

Related stories:

• Netflix: Our bad, you can stream to more than one device
• Child-friendly Netflix interface mysteriously appears
• Survey: Six out of ten movies streamed via Netflix

Want more tech news, silly puns, or amusing links? You'll get plenty of all three if you keep up with Rosa Golijan, the writer of this post, by following her on Twitter, subscribing to her Facebook posts, or circling her on Google+.

Netflix

Netflix streaming through the Vizio TV

UPDATE: Netflix is NOT limiting its streaming! See details below.

Whew! Crisis averted. What looked to be another blow for Netflix customers today — people who pay for streaming plans could no longer watch more than one movie or show at a time on multiple devices — is not really happening. For those who already decided to scrap the DVD mailing plan when the company separated its signature red envelopes from its instant viewing plan this summer, effective Sept. 1, the enforcement of Netflix's single-stream policy could have been the final straw.

Turns out, Netflix had a glitch and sent out error messages, in error.

Thanks to Time for this:

"No Netflix member is limited to less than two concurrent streams," Netflix spokesman Steve Swasey sent in an email. "A few Netflix members have heard differently from us, which is an error that we are correcting."

But, should they ever decide to do this in the future, Mashable reports the enforcement's most likely casualties: "The change could have a major effect on how families use Netflix. No longer can one person watch a movie from the iPad while the rest of the family watches another film on the Xbox, for example."

Netflix caused quite a stir on its own social media platforms this summer with its announcement that members could no longer have a combination plan of DVDs and streaming. The separated plans also came with a 60 percent price hike. (Once a combined $9.99, the streaming service is now $7.99, while the cheapest DVD plan is also $7.99.) This could open the way for rivals such as Redbox to gain angry ex-Netflix subscribers, thousands of whom have said they would cancel their service.

While there was a decline in net subscriber additions from the first quarter of 2011 to the second, the mass exodus has yet to be reflected in Netflix's financial reports — yet. If anything, the third quarter report should show what impact the separation of plans has had.

Netflix also might feel the burn from the loss of movies from Starz. Talks between the two companies broke down last week.

Once those error messages started popping up limiting streams, members once again took to the Netflix Facebook page to air out their grievances on this latest (supposed) affront.

Ryan Condict wrote this on the page this morning, which seems to back up that assertion that families would suffer most by such enforcement:

I supported and understood the reason for the price hike. Still feel that the prices you have are very fair. However, limiting me to only 1 stream at a time is something that will make reconsider renewing my membership next month. I understand a small limit so that people are not sharing their accounts with friends and family which causes Netflix to lose money. But you need to be able to at least have 2 streams with the streaming only package. There are so many times when my 9 year old son wants to watch some disney show or cartoon that I don't have much interest in. So I go to my room and watch an episode of Mad Men or a movie. With this new policy I will not be able to do that. Please reconsider or alter this policy a bit. Once stream is not sufficient for most households with children.

Other members on the wall also chimed in with their own stories, but a few (a minority) said they could see where Netflix is coming from. Jason J. Peugot wrote:

Well it makes sense. I mean think about it. you 'could' give/sell your password to an unlimited number of people -- thereby streaming to unlimited numbers of devices. why should you pay for one subscription and stream to, let's say 1,000 devices? :\

Previously, Netflix's Terms of Use stated that streaming was permitted only on one device — if your plan included "unlimited streaming" and just one DVD. If you had a plan that allowed two DVDs at one time, you were permitted two simultaneous streams. Three DVDs got you three streams.

Now that the streaming plan is totally separate from the DVD rental plan, it had appeared Netflix was enforcing the single stream rule for everyone. The company has yet to update the terms of service to reflect the new plans and streaming policy.

Commenter Scott Dietrich clearly represents the majority of how Facebook posters seem to feel, so Netflix should take heed of this cautionary tale:

I think this is something that Netflix is pretty short-sighted on. I know it has always been in the TOS, but enforcing the policy now isn't all that smart if you ask me. I really don't think it would be too hard to weed out those people who share their information with multiple people. They wanted to separate the DVD and streaming parts of the business, but then they still have the streaming devices you can stream on at the same time tied to which DVD plan you have. That makes no sense to me. I think they are working on something to fix this, but that should have been done before they started enforcing this policy.

More stories:

• Is your Netflix queue in trouble?
• Report: 2 million+ subscribers will cancel Netflix
• Nielsen: Hulu users watch more TV than Netflix members
• Outrage over Netflix rate hike continues

Check out Technolog on Facebook, and on Twitter, follow Athima Chansanchai, who is also trying to keep her head above water in the Google+ stream.

VentureBeat

Screenshots acquired by VentureBeat show a simplified, child-friendly Netflix interface.

Your kids probably think of Netflix as a magical portal to all their favorite shows, but you fear allowing them to browse the service on their own — after all, what if they see something age-inappropriate? Well, if a mysteriously appearing child-friendly Netflix interface is any indication, your mind will soon be at easy about such things.

The folks at VentureBeat recently noticed that a "Just For Kids" section appeared on some Netflix accounts. This section lays out child-friendly content in slightly modified format — one tailored-made for youngsters:

The new interface has a row of clickable cartoon characters on top. When you select a character, the next page shows every episode associated with that character’s show. For example, if you click Aang from the show Avatar: The Last Airbender, you will be taken to a list of 54 episodes of the series. Individual episodes are represented by thumbnails and slider that shows how much of each episode has been watched. 

Netflix has not made any official announcements regarding this new interface and it isn't known just how many users are able to access it at this point. 

Related stories:

• Survey: Six out of ten movies streamed via Netflix
• Half of Netflix users tune in with video game machines
• Nielsen: Hulu users watch more TV than Netflix members

Rosa Golijan writes about tech here and there. She's obsessed with Twitter and loves to be liked on Facebook. Oh, and she can be found on Google+, too.

Netflix

In all the history of the world, or at least this year, does any disaster really compare to the tragedy unleashed on millions of innocent Netflix subscribers with the recent news of price hikes and having to make a choice between streaming and DVDs?

We know for many of you, this is far from a laughing matter, but a site created by Will Ferrell (among others), Funny or Die, with the help of Jason Alexander, would like to add a little levity to the situation in offering this video:

Ok, fun aside, this is more than a $72 increase over the course of a year and not just middle-class, Pilates-practicing white people are affected. But sometimes, you have to take a step back and do some self-reflection if it's really worth all the energy and grief being put into railing about it.

When Netflix separated its DVD and streaming plans, and then raised its prices 60 percent, it caused waves of outrage and played out on Facebook where nearly 81,000 vented about the changes.

While there are more than 23 million subscribers, a vocal faction of them were — and are — mad enough to leave Netflix forever. On one of our recent polls, 45 percent of 27,415 people (which comes to 12,381) who voted said they'd make a clean break with any plan and cancel. The report mentioned in that story predicted at least 2 million members would take their business elsewhere. Netflix's letter to shareholders about its second-quarter showed a significant drop in drawing new U.S. subscribers, bringing it back to the same gains it had in the third quarter of 2010. But overall, Netflix still gained members domestically, with more than 24 million subscribers in its second quarter vs. nearly 23 million in the first quarter of 2011.

And it expected a backlash to its announcement to split its DVD and streaming plans, telling shareholders, "Some subscribers will cancel Netflix or downgrade their Netflix plans. We expect most to stay with us because each of our $7.99 plans is an incredible value. We hate making our subscribers upset with us, but we feel like we provide a fantastic service and we’re working hard to further improve the quality and range of our streaming content in Q4 and beyond."

Over on Facebook, the rage against the Netflix machine is still going, on other threads after that initial announcement. Even posting an update on the addition of "Mad Men" to the stream has done nothing to calm the masses down. See this comment:

Here is why the netflix ceo screwed up and pissed off so many people. Their streaming is lousy. It is not HD or surround sound. The titles available on streaming are very old and very limited. Their deals with studios are small, limiting what they can get, or will get in the future. You must buy a device to view netflix on your tv. You need a data cable from your home router to the netflix device. You can get a wireless connection but there are many problems with wireless. Video streaming technology isn't "there" yet it is still too new to go mainstream. 

So, there's very little laughter for those upset with Netflix. But c'mon, that video, didn't it make you chuckle, a little?

More stories:

• Nielsen: Hulu users watch more TV than Netflix members
• Report: 2 million+ subscribers will cancel Netflix
• Netflix service goes down, Internet anger rises
• Outrage over Netflix rate hike continues
• Thousands threaten to quit Netflix
• OK Go bends to your will, thanks to Google Chrome

Check out Technolog on Facebook, and on Twitter, follow Athima Chansanchai, who is also trying to keep her head above water in the Google+ stream.