Monday, September 19, 2011

Netflix and...Qwikster...

I usually don't have tech talk on this blog, but this whole Netflix situation is really grinding my gears. As a Netflix user for over 2 years now, I consider myself a devoted customer. Even when the prices went up and several of my friends were dropping their accounts with Netflix I decided to stick with them... that maybe with the increase in price they might increase the selection of streaming, continue the user-friendly features of watching movies at home....instead I got an email today from the Co-Founder and CEO of Netflix, Reed Hastings. His email is below in red.


Dear Lindsey,
{It began as most do.}

I messed up. I owe you an explanation.
{at this point I am thinking- who is this? What have they done? This sounds personal.}

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.
{First of all, your "feedback" is your stock points and NOW you are explaining and apologizing? 2 months later?}

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 we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

{Did you know that 75% of Netflix users only use streaming, but that their Starz contract was not renewed?}

So here is what we are doing and why.

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.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

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.
{errrr- WHAT? Two different companies?!?}

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.
{Qwikster- really? You couldn't come up with anything better than Qwikster?!}

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the and websites will not be integrated.
{The websites will not be integrated!!! So I will have two different queues - only confusing the whole process of what I am able to get instantly. If I can get it on instant streaming, why would I rent it and wait for it to come in the mail? Therefore, I will always be opening both websites to compare the two queues.}

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the website is up and ready.
{Thanks for letting us know in advance...}

For me the Netflix red envelope has always been a source of joy. 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.
{Obviously I chose Netflix over Blockbuster, Amazon, and iTunes because of the lovely red envelope....}

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.
{Treated or treating?}

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully Yours,
Reed Hastings, Co-Founder and CEO of Netflix


I just love that this email feels like a boyfriend's apology after a fight. It is months late and instead of just straight up saying "Sorry, please forgive me for blah blah blah," there is an undertone of something that is self-serving and selfishly promoting their new business.

Interesting articles about Netflix controversy here and here and I am sure a zillion others if you type qwikster in your search bar.

Have any of you dropped your accounts? If so, what are you using? Maybe I should start renting movies at the library.

Your intense movie lover,


Patrick Lynch said...

Linz - you might like my friend's (propper comma use, jordan would be proud) new startup: - at least worth checking out.

Hope all is well.

Long time reader, first time commenter -

Patrick L.

Patrick Lynch said...

Crap. It was an apostrophe.

pernotto99 said...

I dropped my Netflix DVD account last week. I realized that by the time I got the DVD in the mail, I wasn't as excited about watching the movie, so it really wasn't worth the money. Now that this news came out, I'm glad I got out when I did. Really disappointing that they are going to let Qwikster die a slow death as they put everything into streaming.

Tison said...

I just cannot for the life of me figure out why you (as a company) would want to make the process so much more complicated. Does Netflix (Qwikster? What do I call them now?) really believe that customers want a more confusing billing and site navigation process? Are they going to make Qwikster a part of their brand new GeoCities page?

This whole thing seems counter-productive and illogical. Of course, I also feel that the distribution companies and the distribution arms of the major production companies are doing nothing to make this easier for the consumer. If they would make everything available for streaming, at reasonable prices for those that provide streaming services, then this would not be a problem or a discussion at all.

I completely agree with Netflixster, the future is in streaming. The large production/distribution companies in Hollywood have never been the quickest to accept advancements in distribution (anyone remember Napster) thanks to the openness of the internet, and here again they are about ten paces behind the curve. They make the consumer through Netflikster, Hulu, Appple, Amazon, the list goes on and on jump through hoops to make everything available via stream. Of course this benefits them to have all these different options and people fighting over the streaming rights because they can then get more money. I could, clearly, go on and on for a bit here.

Sure Netflixster is wrong to alienate people who want to rent DVDs, especially since they where the harbingers of the demise of the local video rental store, but they are just trying to stay abreast of the trends of the era and not go the way of so many other corporations who didn't innovate before it was too late. I just wish they were going about this in a more sensible way, not in a way that actually makes it harder for the consumer.

Tison said...

I'll hang up and listen to your comments...

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