Monday, October 10, 2011

Netflix Dumps Qwikster

In yet another admitted mis-step, Netflix CEO Reed Hastings, announced Monday the company WOULD NOT be splitting off its DVD by mail service into another company, called Qwikster.

This story is like the social media faux-pas that wouldn't end.

First, Netflix turned off a lot of customers by raising rates for people who want streaming movies over the Internet and DVD's by mail. Then, ignoring the tumult and passionate (negative) response to their changes, changed again and decided to spin-off the DVD rental portion of its business.

Oh, and let's not forget that they did so without first checking to see that they could own their new name in the social media landscape. (Point of fact, they DID NOT own @Qwikster, which belongs to a pot-loving dude with attitude and no knowledge of the Netflix problem.)

As the stream if negative comments flowed across the Internet, Netflix turned a blind eye and the stream became a deluge. Subscribers jumped ship (although I don't know where they think they're going-Netflix still has the best deal, by far.) Forecasts for growth were changed to reflect a downward trend and investors started to complain.

It looks as if Netflix has finally capitulated and Qwikster has been killed. But has the damage already been done? Message boards, status updates and Tweets are still blasting the company; competitors are seeing a small surge in interest, and everyone is pointing to Netflix as being (perhaps) the most obtuse company operating today.

Honestly, I don't know how they could have handled this situation in a worse way unless they sent every subscriber a package of fire ants and dog poo in their little red envelope.

In a blog post, Netflix Chief Executive Reed Hastings acknowledged the company had made a mistake in attempting to spin off its DVD-rental service into a website called Qwikster, separate from its streaming-video service.

"It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs," he wrote Monday.

The Los Gatos, Calif., company, which sends customers DVDs via mail and also gives them access to a catalog of movies to watch over the Internet, had angered subscribers with two recent moves. In July, it raised the price of one popular subscription plan from $9.99 a month to $15.98 a month. Then in September, Netflix said it would spin off the DVD-by-mail service into a Qwikster subsidiary, while Netflix would remain a website for streaming video.

Members bashed the idea on Internet message boards, complaining it would be difficult to visit two separate websites to rent and watch movies.

Click here to read more about the Netflix debacle.

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