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
My subscription dropped $2.00/mo. in price when they split off streaming.
I'm good with that.
The local video store charges $3 for a new release.
If you bring it back two days late it costs you $9.
That's more than the monthly fee ($7.99) for my netflix sub which I can usually get 8 or 9 movies per month and don't have to worry about how long I have them.
I've also found the movie DVDs I get from netflix are in far better physical condition than the ones from the local store.
Plus I don't have to drive a 15 mile round trip to the video store.
You see it as streaming was free due to when you joined. For when we joined we joined on the understanding streaming and a DVD was one package
Aug 23, 2010 VISA *** *** Monthly membership Aug 23, 2010 - Sep 22, 2010
$16.99 (+$1.19 tax) $18.18
Jul 23, 2010 VISA *** Monthly membership Jul 23, 2010 - Aug 22, 2010
$16.99 (+$1.19 tax) $18.18
Jun 23, 2010 VISA *** Monthly membership Jun 23, 2010 - Jul 22, 2010
$16.99 (+$1.19 tax) $18.18
May 23, 2010 VISA *** Monthly membership May 23, 2010 - Jun 22, 2010
$16.99 (+$1.19 tax) $18.18
As from Jan 23, 2011 - Feb 22, 2011 it went up too $17.99 all so excluding tax. Now we pay $7.99 excluding tax but there not charging us tax either.
Now if we had what we had before Streaming 2 DVD and bray access it be $23 + tax
Netflix will be dead within a year, since every media corp wants their own streaming service. Was good while it lasted. Enjoy paying 10$+ a month for each individual network in the future.
The kicker with this story is their alienating their customer a little more by ditching the DVD business in favor of the streaming. Well, not ditching, but spinning off. Profits are still there to be had, but I think the management has handled the situation horribly. Netflix should stay as one company, work on getting content added to their streaming service and if they so chose add a game rental service to Netflix.
I think there's just something about the semi-anonymity of an internet forum that encourages people to rage and vent so much.
/ontopic
I am convinced netflix won't be around for much longer, as the movie and tv companies seem determined to force them out of business by making them charge more.
Nearest redbox is about 20 miles one way.
Redbox :
8 movies per month = $12.00
16 miles per movie * 8 movies @ 20mpg with gasoline at $3.65/gallon = ~$24.00
Monthly cost = $36.00
Netflix :
$8.00
No contest? Since it would cost me 4.5x the price of netflix to use a redbox, I suppose that statement would be applicable in my choise of using netflix.
I use to be a huge supporter of Netflix. I've been with them for 8 years or more. I didn't complain over the small increases over the years. When I joined I believe 2 at a time was around $10. I didn't complain over the incremental increases, because those are easier to adjust for. I didn't even complain when they wanted to charge a little extra for BD's. Didn't necessarily like it, but thought it wasn't too bad. But going from $17 for 2 bd's + unlimited streaming to $25 is just unacceptable without some sort of additional value added.
My $25/ month will be going to redbox, tyvm. Yes, I'm complaining, when the service was previously free with a DVD plan, and the content is 90% garbage.
I don't know about anyone else, but I actually want something worth my $8/mo. The current selection is not it. If it had a better selection, I'd be all over it. But it doesn't.