Reed Hastings sent me an e-mail Sunday night -- did you get one too? -- that began:
Subject: An Explanation and some reflections
Dear Jim,
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....
Oh, Reed. You don't owe me an explanation -- or any reflections -- and you know it. You're just doing exactly what you said you were doing when you made that announcement in July that you now say was lacking in "respect and humility." Only now you're doing it in a way that reeks of condescension and disingenuousness. Not an improvement.
A couple months back, I noted here that Netflix had already announced on its tech blog that it was going to discontinue mobile app support for managing DVD/Blu-ray queues. When you announced, at the same time as your price hikes, that the DVD/Blu-ray-by-mail business would be reconstituted as a separate division, it didn't take the sharpest taco on the beach to figure out what your next step would be, and now you've announced it. Netflix wants out of that business that relies on the nearly bankrupt Postal Service. OK, we get it.
In some ways it makes sense, since analog delivery of digital information is illogical. (Does the Columbia Record & Tape Club still exist? Apparently not, but I found the Columbia House DVD Club, whose slogan is, hilariously: "Pay For the DVDs You Want, Without The Streaming You Don't." Of course, we've all seen "A Serious Man," so we know how they operate. They just got hit with a class action suit in August.)
But here's what you still don't seem to understand: You don't announce price hikes now at the same time you promise vague improvements in service at some point in the indefinite future. You don't trumpet the formation of a new company/division without showing -- right now -- how that new label improves on what you've been offering in the past. In other words, don't expect money for nothing. Or, worse, less.
This isn't the way to go about it:
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.
So, you don't even like the new logo. Thanks for sharing that. "It is just a new name." Oh, that's something to get enthusiastic about. And there will be video games. A whole new market for you... and nothing for existing movie customers. (This is like saying: "Hey combination Pizza Hut and Taco Bell fans -- we'll now be selling shampoo, too!")
OK, maybe this isn't exactly New Coke (yet), but when it comes to tone-deaf CEOs, Reed, you're proving yourself the Real Thing™.
(Oh, and Gizmodo reports that the Qwickster Twitter name already belongs to "The Foulmouthed Pothead.")
14 Comments
My sentiments exactly when I found this smarmy corporate missive waiting in my in-box this afternoon. And "Qwikster" is a pathetically bad name for anything other than a hip new chocolate powdery product from Nestle.
I didn't much mind the price hike, but this really annoys me. Two accounts? Two queues? Are they purposely trying to lose my business? And - am I being paranoid, or is the quality of the DVDs going downhill? It seems like I've had to return more recently because they are unplayable. Sigh. I used to love Netflix. I feel so betrayed.
Netflix spent 10 years or so establishing a brand name that was almost as synonymous with "getting DVDs" as Google is with "search" and has spent 3 months doing everything it can to dilute the brand. They now don't even want the name attached to the very thing that defined them, and instead want to be identified with a mediocre product that they plan to improve some day. If they can, which is a mighty big if. Talk about jumping the gun on our shining streaming future.
But I don't blame Hastings. You can no more blame a CEO for pursuing higher margins than a dog for sniffing its butt, or Sam Mendes for being condescending. I blame everyone who switches to the streaming only option. By accepting inferior quality and selection in the name of convenience, you only insure that we all have to accept inferior quality and selection. It's not going to improve, or rather it's never, ever going to match the selection you currently have on DVD if you could just be bothered to plan your life one day ahead of time instead of absolutely, positively requiring that your (severely limited) choice be available the second it flits across your field of vision. Oh, the broad selection already on DVD might eventually be out there somewhere, but it will be split up among multiple sources and likely require multiple subscriptions/memberships. But it'll be fast (except when you run into broadband restrictions, which will be much of the time, unless you pony up for a higher delivery tier, but never mind) and that's all that matters. And why not for those who are just going to watch it on a 7 inch screen anyway?
For those sticking with the DVDs, enjoy it while it lasts. They won't be replacing lost inventory, or worrying about maintaining the same array of titles, at least not too hard. Because they need the product (Qwikster) to get worse, because that's a lot easier than making the new Netflix better.
We can still love Qwikster and remember how this beauty changed our cinematic lives. Let's hope it's a long goodbye.
I wasn't even THAT annoyed with Netflix until this ridiculous letter. I was upset over the lack of mobile app support, but I'm completely disenchanted after learning that there will be no integration at all between the two queues. The letter might as well say, "In response to recent customer feedback, we have decided to make our service crappier."
Add to that the continued decline of Netflix's selection of older and/or foreign titles, and I see no reason to continue to support the company.
Qwikster sounds like a laxative.
I cancelled my netflix subscription over a year ago when I noticed they were no longer purchasing the 2 disc versions of movies.
I enjoyed all the extras they are no longer making available to subscribers. Isnt that what home viewing is all about?
Thanks for allowing us to vent.
What baffles me is that having a single queue is an excellent way to market the streaming service. Marginal quality aside I have watched the streaming version of a film that I'd originally added as a disk when I saw the little "Play Now" selection show up. If I opt to go with Qwikster (why not DiscFlix or MailFlix or DVDFlix?) I'll never know if their adding films I'm interested in to their streaming catalog. That seems like an odd thing to do if you're trying to convert disk customers to streaming customers.
Reed Hastings should be forced to watch "Mega-Shark vs. Crocosaurus" and "Hobo with a Shotgun" with his eyelids forced open like Malcom McDowell in "A Clockwork Orange".
I'm really enjoying this slow-motion train wreck.
Reed, do you even like movies? I need an answer, qwikster!
There are many problems with this.
First, the name. It's horrible. "Netflix" is clever and more or less describes the service. "Qwikster" doesn't mean anything. It could be a gas station / convenience store for all anyone knows.
The marketing plan is severely flawed. When asked about the fact that the "Qwikster" Twitter handle was already taken, the VP of corporate communications responded that the company had not yet through through details of their marketing strategy for this new company. *Spit Take* SAY WHAT?!?
Trying to launch a new business without mapping out a detailed marketing strategy (that in this day and age includes social media) is a rookie mistake a mom makes when she buys a DSLR and thinks she can become a full time photographer just because her friends think one of her lucky automatic-mode shots turned out kind of nice. It's NOT the way an established, successfully marketed company run by experienced professionals spins off a new venture.
The timing is so far off that, frankly, no one can even see the right timing from here. Netflix clearly wants to position itself as a streaming company. Problem is, the distributors have all of the power right now and THEY DON'T WANT NETFLIX TO SUCCEED.
Starz walked away from a ludicrous pile of money offered by Netflix because they know that they risk ticking off the cable companies and other associations by continuing to embrace this "evil streaming fad." The fact that Netflix can't get what it wants on the streaming front by just throwing ridiculous money at people is a huge setback for them. Sure, they claim that "Starz doesn't matter" and that they'll replace that content... but with what?
Customers are already complaining that Netflix streaming is becoming the repository for just TV and movies no one wants to watch (Ghostbusters 2 anyone?).
Studios are holding all of the cards and instead of inspiring confidence, Netflix pulls a boneheaded move that scares investors and ticks off almost their entire customer base.
Quickster sounds like a gas station that sells expensive groceries. Wait, that's Quik Star.
Yeah this whole thing with Netflix has been one blunder after another. Personally I can’t wait for the new Blockbuster Movie Pass coming out on October 1st. As an employee and subscriber of DISH Network I was psyched to see that it will include 20 premium channels, by-mail dvd’s/blu-rays/and games, plus streaming. It beats out Netflix in virtually every way and for only $10 a month. I’d like to add that you can get this free for 12 months too when you sign up now. You can check the details of that here: http://bit.ly/pzsPYW
I'm still holding such a huge grudge against Blockbuster for destroying the video store business and making it impossible to find "old," foreign, and unedited (i.e., uncensored!) movies that I refuse to support them in any way shape or form. So far, Netflix has simply irritated me. Blockbuster? I'm still hoping that they'll rot in hell. Probably sounds irrational, but I can't help the way that I feel about that company.
What is it about human nature that on the rare occasion they manage to get something RIGHT they have to go and destroy it? Netflix was a shining beacon of a company that got things right. I've been a member since 2002 and recommended them to anyone who would listen. I now feel like I've been played for a fool.
With the price hike, for the first time in 9 years I switched from a 3-at-a-time plan to 1-at-a-time. Sorry Netflix, didn't you hear? People don't have a lot of money these days. You seem to be oblivious about a great many things.
I am OK with them splitting up the company so that I can have DVD-only service. It's a pointless move, no doubt about it, but I could live with that since I have zero interest in streaming. A fact that Netflix and many people who live in city areas overlook, is that a HUGE portion of members are those who live in more rural areas. Having little access to rental places, Netflix has been a sanity saver, especially for those of us with long winters. There are millions of us and we're the demographic that is ignored. People who don't live in cities usually have limited choices for internet service, and overall, slower speeds. Therefore, for us, streaming video is not only undesirable but often unrealistic. This is the main complaint I hear from people in the town where I live, and friends across the country who also live in more rural areas.
Honestly, what's the demand for streaming? Is this the product of a public that lacks any patience whatsoever to just wait a day for a disk in the mail? Why buy these gorgeous LCD televisions with superior picture quality and then run inferior streaming quality picture through them? Or worse yet, watch on a computer monitor? For those who need an adapter for their TV to even make this work, pay MORE money? Honestly, I don't see the lure.
If I can keep getting my DVDs, fine and good. But unfortunately, I AM noticing more damaged disks arriving, more and more titles unavailable that should be there.... and the huge delay in new releases (a month behind everyone else, I think?) is frustrating. It's just so disappointing. I don't know what else to say.
Christopher Long, your review really nailed it. "I blame everyone who switches to the streaming only option. By accepting inferior quality and selection in the name of convenience, you only insure that we all have to accept inferior quality and selection."
Netflix synonymous with "inferior"... never thought I'd see the day, but it's coming, if not already here.
Did you get a second email? About the reversal? I didn't. I had to read about it in the news, which is yet another insult to this "valued member." Reed Hastings is on crack.
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