Posted on 09/19/2011 5:56:25 AM PDT by Usagi_yo
On Mon, Sep 19, 2011 at 7:49 AM, Reed Hastings, Co-Founder and CEO of Netflix wrote:
Dear Chris,
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.
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.
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.
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 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 qwikster.com 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 Qwikster.com and Netflix.com websites will not be integrated.
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 Qwikster.com website is up and ready.
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.
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.
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, Netflix
p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments
I like watching the old TV shows. That said, I don’t watch them much. And it ticks me off they have so few new movies.
In July I received their notice of the separation of business and the price increase. I told a friend of mine who has their stock that the company just made a huge mistake and the stock was about to tumble. He didn’t believe me. He thought I was just pouting.
But, I cancelled my membership, it was just priced out of my budget, and have since learned that many others have cancelled theirs. I sure hope my friend sold his stock early.
Why can’t a business raise prices? Why apologize for it? If it costs too many customers - then reverse it. But why look foolish and weak with an apology, and trash your own brand name?
Does netflix have a decent HD selection in streaming yet? Last time I checked it didn’t appear that they had much.
Here is my first impression of the new name:
Quickster => Quickstar => Amway
People who throw away successful branding are insane.
What a terrible idea!
If I want to watch something, I do via streaming if that’s available, and put it on the dvd queue if not.
How is it helping me to make that two separate services, two separate web sites??
Separating the two branches is the first step toward winding down or selling off the old DVD delivery system.
Also, it would allow a bankruptcy in the old branch without it affecting the new branch.
There are too many other streaming only competitors cropping up out there. In order to survive, Netflix has had to make some bold, albeit unpopular decisions.
Fed up with Netflix DVD crap, I dropped that and will retain only the live streaming aspect.
I just dropped the DVD portion of my account - no way in hell I’m maintaining two queues.
This is where they’re screwing up. No one wants to do the same searches twice.
People will drop one account or the other. Sure there will be some who keep both, but, in the end, this will be a net loss for Netflix.
And new sign ups? Who will sign up twice. This is a no win situation, for Netflix and for their customers.
Dumb.. just dumb..
With so many sites streaming movies and TV shows for free, it was going to be hard for Netflix anyway.
>>Why can’t a business raise prices?<<
They can, however if they want to keep customers, they give an explanation and treat their customers with respect. Netflix dropped a bomb on customers that had been loyal for years.
Just as a business can raise prices, a customer can drop the service. Most businesses work to keep those people.
Oh, and this was far from an apology. It was am “explaination” that the CEO gave with a smary smile on his face. It was an announcement of the split. Watch the video. I’m surprised he didn’t have a teleprompter or two.
This looks bad to me too, especially since Amazon now has a service too. I am thinking of the switch if convenience is compromised, considering I get free shipping from anything I buy on Amazon on top of the streaming.
Ditto, same thing here, I too had the 3 DVD plan, no longer, livestream only now.
Or even Qwikflix is better than Qwickster. And if they just had to call it Qwickster, they should’ve spelled it Qwixter.
Indeed. If they had to split them, they should have kept Netflix for the DVD’s and named the streaming business Quickster.......
Double dumb!
Is this one of those “I’m sorry *you* misunderstood me.” sorts of things?
Got to admit, Wife and I enjoy South Korean movies. They have a great sense of humor and they play it in even into serious flicks etc.
Only to all you city folk. Here in the sticks we ain't got broadband and probably won't for the next 10 years or so. Streaming is out of the question for thousands of us. I love my DVD by mail, saves me the 50 mile round trip to the Redbox.
Give the old product a new name and give the new product the old name? What fool thought that was a good idea?
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