What Was Netflix Thinking?


Wow, Netflix, wow.

A lot of people were angry at the Netflix price increase, enough so that at least 4% of subscribers quit in a very short period of time (and that’s a lot in business terms). But to add insult to injury with an already upset customer base? That takes some balls – or plain out stupidity.


Netflix CEO Reed Hastings published a blog post yesterday that was an apology – of sorts. Actually, it really wasn’t an apology at all. It was a very poor attempt to justify their price increase by saying what they really intended all along was to split the company in two! Yep, no one-stop-shop anymore…if you want DVDs, you’ll have a separate account at the poorly named “Qwikster,” which is a name that either brings unfortunate associations with Amway or chocolate milk and a bunny.

I have to wonder what PR person is giving this guy advice. The blog post as written was not only insincere but disingenuous. My thought was, when I was reading it, was something like this: “Oh, so what you are really saying is, you’ve been planning on splitting up the company all along. Only, you lied to us about it and are only now telling us. Either that, or you made a last-minute decision to split the company up, which is just plain stupid.”

Customers hate price increases, but I bet they hate being lied to even more. This feels like a bait and switch.

Judging from the comments on the blog post, the majority of customers are outraged. I have also been a customer, and the ironic thing was, I was actually OK with the price increase, and was going to pay it, but now that they’ve split the company, I am not only planning on dropping the DVD service, but thinking of canning Netflix altogether. In my view, the streaming service alone is not sufficient because the library is poor, and the DVD service on its own isn’t worth it, because as long as I have a separate account, I might as well go to Blockbuster where I can get a free DVD trade-in at my local store.

Here’s my own comment that I posted on the Netflix blog:

Funny how I was unable to find an email address to send my comment to…well, here’s my feedback. I have not been a long-time subscriber to Netflix. I previously used Blockbuster for DVDs and was very happy with them, but they did not offer a streaming subscription. But I was willing to pay the extra fee you recently announced for Netflix, in hopes that you would use that money to improve the streaming options.

Now that you are splitting your service – and announcing it with this smarmy and insensitive blog post – I am going to cut the Netflix (Qwikster) DVD service and then assess whether I want to continue Netflix streaming. Your streaming selection is poor and now with Starz going it will become even worse. As for DVDs, I will either go to RedBox or back to Blockbuster, where I can trade in my mail-in DVD for a free DVD at my local Blockbuster store.

I have Hulu Plus and I am already using that more than Netflix streaming. Amazon Prime doesn’t have a huge selection but they will give me other perks at Amazon, so I will be assessing that as an alternative to Netflix streaming.

I am constantly amazed at how so many companies make such massive missteps as to destroy a thriving business. Meetup recently did it with a poorly-implemented redesign that they had gotten no customer input on prior to launch. It appears that you are also not listening (or even asking for feedback from) your customers prior to making such monumental changes.

At any rate, I have no loyalty to you, and you don’t seem to have much loyalty to your existing customers. You obviously are so locked up in your little bubble that you think announcing the split-up of your business constitutes an “apology.” This is not an apology, it’s a slap in the face. You are reducing services and convenience in exchange for a higher fee – that you actually thought this was going to be well-received is astonishing.

And the funny thing is, my comment was relatively mild compared to some other ones. With so much outrage, Netflix may have just killed the company with this move, so even if you want to stay, whether you might want to look at alternatives. Netflix will be hemorrhaging customers left and right with this and they may not be able to recover.

Given how volatile the Internet is, it’s always interesting to see how companies reach certain turning points in their lifespans. Some folks have likened this as the moment Netflix “jumped the shark.” Certainly, at this point, I’ll be surprised if Netflix is still its own company in five years. If they are lucky, Google will buy them out. Otherwise, I can see them entirely shutting their online doors. Oh well. It was nice while it lasted.

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