Tuesday, September 20th 2011
Customer Agony over Netflix's Price Rises & New Split Personality
Netflix's CEO, Reed Hastings, has apologized for mishandling a recent price increase that caused customers to fly away in droves. However, that was immediately drowned out by the decision to split the Netflix service into two, one with the odd name of Qwikster. The new streaming service will still be called Netflix and continue to have the same dedicated website as the old physical media one, netflix.com. However, the DVD rental service is now branded Qwikster, which will also have it's own site. Crucially, both sites will operate completely independently, which means separate logins and user profiles for each one, causing significant inconvenience to customers.
To all intents and purposes, Qwikster will operate as a separate entity and even have it's own CEO, while being owned by parent company Netflix. This all appears to be a strategy to wean customers off the old physical media service and onto the new streaming one, although it instead appears to be doing a better job at alienating all its customers, who can find the kind of service they want from places like Amazon and iTunes. Once again, Hastings apologized for the inconvenience and said:
It remains to be seen how well Netflix does over the next year. However, they are very well established and streaming is the way forward, so I think they'll pull through. They should just remember it's their customers that keeps them in business and treat them well.
A longer version of this story is available over at Yahoo News.
Source:
Yahoo News
It's hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best.On top of this, the streaming service doesn't have anywhere near the same range of movies as the old DVD one, making customer retention a challenge. Unfortunately for Netflix, all this is taking its toll on the bottom line, with 600K customers fewer at the end of this month than at the end of June, by far the worst downturn the company has ever seen. This has wiped 53% off the company's stock value, which translates to around $8 Billion lost. The fact that Netflix were unable to renew a contract with a major supplier of movies, really isn't helping, either. Hastings has always steadfastly refused to rent video games. However, to help stem the tide, Hastings now wants to start renting these through the Qwikster service.
It remains to be seen how well Netflix does over the next year. However, they are very well established and streaming is the way forward, so I think they'll pull through. They should just remember it's their customers that keeps them in business and treat them well.
A longer version of this story is available over at Yahoo News.
72 Comments on Customer Agony over Netflix's Price Rises & New Split Personality
600k people leave, your main company, only company behind you in movie steams, leaves... Now you split the company to add games...
If they told me..
"We've made a profit this year, so your now going to get games.. but, there's a catch.. Gotta raise the monthly dues..."
I might of stayed..
Not raising the price after a profited year, just to have everyone of the 600k people that left think... You raised the dues, to allow yourself to have even more money to expand while leaving the ONE THING that your pushing have p1ss poor quality..
Oh, well.. Others will look at my rant differently.. I don't really care..Here you go Rockz
I am just amazed at netflix recently, things are just falling apart over there.
techcrunch.com/2011/09/19/the-guy-behind-the-qwikster-twitter-account-realizes-what-he-has-wants-a-mountain-of-cash/
I cancelled my membership in March,Why it costs more the renting movies when the internet service starts charging more for it.
I need a job and I can fix this whole problem for you in 3 weeks. I seem to have one very important skill your CEO does not. COMMON F%&^ING SENSE! Call me.
I know change is needed.. Oh, man I know they need to change.. But, I don't think that separating the company, to allow yourself a "out" for when you feel DVD-Mail-in's go "south"... Is the way they should handle it. Which I don't even think will for quite a few more years at most..
Steaming can't give you the stuff that your dvd/blu-ray can.. Yes, we are at the age where more people are wanting tablet/smartphones to run everything... So, their streaming right now is "all right"... But, like I've said in my posts on GN... I don't use a tablet.. Nothing to use yet for myself or business.. So, till they can fix the steaming to where Laptop's use it just fine... I'm cancelling.
Now their instant stream library seems to be fluctuating again. Few movies on instant, aren't anymore. Just a pain in the butt.
Just one bad business move after another this year. To go from a rental giant to now this...Netflix is doomed. Quikster isn't going to save it. Just gonna make things worse and eventually they'll add streaming too to get more customers and return full circle to Netflix. Renting games is a whole world of hurt if you don't have experience in doing it. Gamefly does and I really don't see Quikster becoming a success on this.
TL;DR: Netflix was fine, streaming isn't the same as DVD/Blueray.
Netflix is known for library fluctuations... Steaming is the same way.. Some times every few months they take the stuff off and you lost what you had in the que...
Anyways we stopped the DVD and bluray rentals some months ago as this has been said to happen for some time now..
They all so limited how many devices that can be connected to but not heard any thing of that YET.. We noticed a few weeks ago and was limited to 2 streams only not the 3 we commonly use.
Thing is though in the end it's hell load cheaper than having cable TV...
But anyway, the fact is that they added streaming and didn't raise prices, my price for the 2 DVD package remained the same. In fact, they added a 1 DVD package while I was a member that wasn't an option when I joined, and that was cheaper, and they still gave streaming to those customers for free. They also added a 1 DVD limitted package that was even cheaper still, and still gave streaming.
You've been getting the service for free for years, so STFU about finally having to pay for it. It certainly wasn't free for Netflix to implement it and provide it to you, so you should be grateful it went this long for free, and not bitch when you finally have to pay for it.[/rant]
His letter was like "I'll make up a nonsense excuse for why we screwed all of you; oh, and by the way, we are making life a little harder for you guys who want to keep both services at the higher price, all without any added value, have a good day"
I've been a client since 2007, decided to continue with the streaming service only starting this month, but after the news that Starz was leaving Netflix broke up, I no longer know if I want to use their service.
Besides, I heard Blockbuster will start their own streaming service at a very competitive price, that's what the market needs now, as Amazon Prime and Hulu+ were never able to reach the same popularity Netflix had.
A few decades from now schools may use Netflix and HP as examples of how to kill a business model in a few easy steps for their economy courses. I would hate to have stock on both companies and see half its value go up in smoke in a few months due to some piss poor judgement from their CEOs.
I am not sure if streaming does give you the 5.1/7.1 channel audio option.
I will cancel DVD/BD option if they allow me to watch same new releases thru streaming with BD quality and multi-channel audio option.
I can see why you stopped subscribing. It's very irritating when a company artificially and arbitrarily limits things in this way, isn't it?
I don't care for the price of streaming.. they needed it.. I care for how they are doing it.. the steam is fine by me to pay for.. But, Profit year, and raise price.. Profit year, raise more price.. They could of done it a lot better if they were up front with everything.. Not, beat around the bush, and still.. don't have a smarter reason for it..
How did u get it to work?