Thursday, September 22, 2011

Netflix Continues to Implode

Have you ever had a friend who has been going down the wrong path in life? You want to help them but they just won't listen. That is how I feel about Netflix.

After the price-hikes it appears that hundreds of thousands of customers have cancelled their Netflix accounts. This doesn't even account for the hundreds of thousands who have cancelled either streaming or disk rentals (like me). Well, this drop doesn't make Netflix shareholders happy. The stock has tumbled from just under $300 to lower than $170. OUCH!

So, I received an e-mail from Reed Hastings, co-founder of Netflix. He says, "I messed up." What he DOESN'T say is that he'll take back the price increase. Simply explaining your business plan isn't going to make us forget about paying more each month and not getting anything extra in return.

What is the brilliant business plan? To split Netflix streaming and DVD services into two groups. The DVD service will be renamed Quikster and will be totally independent of the streaming service. That's right - the two services won't communicate at all. So when you're looking at a DVD you won't be aware that it is also streaming on Netflix.

The comments left on Mr. Hasting's apology blog post are the best. Clearly NOBODY is happy with this move. Netflix would have done better to just shut up and stick with their guns instead of offering this fear-induced, half-hearted apology/explanation. Here's a sampling from the comments:
Cary J Hill
Excellent....I enjoy watching an entire corporation suicide itself! 
Ben Cornue · Chicago, Illinois
Well, after 7 long years enjoying Netflix, this appears to be the end.
Kile Golder · The Walt Disney Company
Dear Reed Hastings, Co-Founder and CEO, Netflix,

I am a little unsure what exactly it is that made you so angry at me. For so many years now, I sent you money and you sent me DVDs in the mail. I felt our relationship was going well. At one point, you offered the opportunity for me to watch movies instantly online, and later, directly on my television. In turn, I felt it was right to send you more money, and I gladly continued to do so. And again, we both seemed to be quite happy with our relationship. But recently, you've changed. Sure you are still happy with taking my money, but now it seems like you want me to give you more, while in return you give me less.

Well, I guess Netflix isn't as important as I thought it was. If I want to be entertained I can just read the responses to Mr. Hasting's blog post here.

Here's the same explanation in a video. The only advantage is we can SEE him smirk.

1 comment:

  1. I came across an article this morning about Netflix's recent stock performance.

    Turns out, their 3rd quarter saw a reduction in DVD subscribers go from 3 million to 2.2 million. That's more than 25%.

    Streaming only subscribers dropped from 10 million to 9.8 million, or a loss of 200k.

    Their stock has plummeted from $300 to $150 a share.

    To read the full article, go to: