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Co-founder of Netflix's so-called apology

Netflix's apology for their 2011 price increase.

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Netflix is Playing With Fire..Remember, Customers Always Have a Choice!

  • Sep 21, 2011
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Please bear with me, this is not a review on Netflix or the service they provide. This is just a simple opinion on the so-called 'apology' by the Netflix CEO.

When Netflix showed up, it revolutionized the way we rented movies. I mean, it made me want to see more movies, and my rental activities went through the roof. It was such a relief and so convenient to get movies via U.S. mail with a fixed price. The heck with Blockbuster rewards that make me pay $ 0.99-3.99 per rental, after 5 rentals you get one free. It was so good that Netflix made Blockbuster re-think its strategy and even when it did “Blockbuster Online”, it was too little too late. Netflix even did a streaming service that is now a very valuable addition to the service. (Though the selections were pretty limited)
Granted, Netflix had gone through a lot of hurdles and seems like Time Warner (part owner of Blockbuster) did a cheap thing as competition in making Netflix customers wait for their movies, while Blockbuster gets exclusive advance releases (Direct TV gets them sooner ondemand too) and their customers stuck with them. I mean, I don’t mind waiting an extra 2-3 weeks as long as I didn’t have to go to the store. I wanted the convenience since I am very busy.

Netflix then announced the split up of dvds by mail and streaming service. I mean I still didn’t mind; I don’t mind paying $ 19.95 for 2-at-a-time dvds by mail/streaming as long as I had convenience. But now, they had announced that they are splitting up the service and those who want both will have two charges in their c-cards. It is unexplained if it will require me to go to two websites, but now I am pissed. Really…What is up with the drama? Games will be added to the new Qwikster service and streaming will be called “Netflix”..? . Ok, I know you are trying to evolve with the times, but why all the secrecy? I am not a huge wallstreet kind of guy, but it was obvious that Netflix did the price hike, the split and secrecy for shares positioning. Too bad it backfired and your share prices plummeted when you lost more than half of your subscribers. Bad enough that the reduced dvds by mail is probably already hurting the USPS.
Netflix, I understand your need to keep up. But why all the drama and then you make it worst with an apology cooked up by a P.R. guy? Be honest to your loyal customer base, it wasn’t the first time the company got accused of manipulating your customers (remember the “delay new disc delivery” hoopla for heavy users, before?), I know this seems all a matter of greed and making more money. Question is, why fix something that wasn’t broke? Who benefits with the split up service? Not your customers, since they are just about to get charged twice. Certainly no one minded the wait for releases or the mail. Streaming movies have a much longer wait in regards to New Releases and the quality really isn't as good as Bluray or even dvd on an HDTV. Separating things certainly doesn't benefit the mail service, but it is cost efective for netflix to discourage dvds by mail. Wait, how soon will it be before internet providers start charging per download? Comcast had started I think, but I am not sure. This move benefits no one but Netflix itself.

 I remember when "Target" and East Coast's "Marshall Fields" separated from 'Mervyn's California" stores....and we all know where Mervyn's is at now. I guess this is just more a sign of the times. Consumers do need to vote with their $$.
Boo!! Who am I kidding? I probably will keep the dvd service since I am too lazy to go to the store, I guess I am stuck. Habit makes one tolerate a lot of things….but wait…there is ondemand. I also managed to break the habit of smoking; I think breaking the habit of getting movies in the mail would be a lot easier than the habit of smoking....

Hmm... I have until the 28th to cancel. Let's see what I'll best friends have been doing the free movie services (video sharing) along with REDBOX. So I do have a choice!

Really, Netflix...? You do this even after your loyal customers stuck with you through all the delays and not-so New Releases?

Thank you for reading my rant....

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January 12, 2012
Convenience trumps everything these days !
September 24, 2011
Yeah I didn't like this thing either.
September 24, 2011
It was totally weird how they handled the whole thing. I mean, why would you want them to charge your card twice when it was fine just the way it was?
September 23, 2011
I do believe that Netflix will bounce back, though not this year. Their ambition was clumsily timed - streaming video is neither sufficiently advanced nor entrenched to justify that stunt.
September 23, 2011
That is a great observation. I mean streaming movies has so many glitches and some folks these days cannot afford to get a new computer (or that box) and/or faster internet to make it a  real pleasant experience.
September 24, 2011
Honestly, I like NetFlix and may subscribe to their (now ill-monikered) disc rental service again. However, I can't bother to patronize their streaming service until they provide options for Linux-based user agents.
All that aside, this gaffe very nearly constituted a breach of trust, and former subscribers aren't obligated to forgive them.

Also - "Qwikster?" Eh.
September 22, 2011
Great post. Unfortunate how low they've sunk. Everyone loved them and overnight, turned on them. Too late for damage control?
September 22, 2011
Not sure, Dev. I do know that their stocks did take a major pounding and their customer base have really sunk. I didn't mind the price increase, I just made changes to my subscriptions; I understand the need for price increases but I feel that this was just a ploy to get stock advantages and that they are positioning themselves to get rid of the dvds by mail service, and this was the service that MADE them what they are in the first place. I dunno, as I told Nicholas, I may now cancel just out of principle. I don't need two credit card charges and more things for me to monitor. I could just stick to one service (dvd) but now I am pissed. They should've been honest from the start instead of playing games. They seem to think they can do anything considering just how big they've gotten....but customers always have a choice.

They've forgotten that there are free video sharing, and REDBOX and BLOCKBUSTER will now take advantage of this mistake. If Netflix sinks, it would be their fault.
September 22, 2011
I hear ya. I was confused about the whole Netflix/Qwikster thing. They should have been more upfront and made it easier for customers to adjust to the changes. I can't believe such a big company could make a mistake like this. There are few times when stocks plummet that much.
September 22, 2011
Guessing what's left of Blockbuster is going to swoop in and take advantage of this. Bad move. BAD move.
September 22, 2011
I agree. I may just cancel netflix out of principle, even though I could afford the price hike. It was a very bad move.
More Netflix's Apology For Price In... reviews
Quick Tip by . October 04, 2011
Heh. I saw several commercials by Blockbuster and one by REDBOX. They both use the stupidity Netflix had done as their platform for their ads. They establish why people should use them more now, and one common thing they say: "we do it for a lesser price, while netflix had raised their fees by 60%".  Blockbuster had also promised an improved turn-around and better selections. RedBox is a different animal and yet they've extended the period. You can also return the movie at any …
Quick Tip by . September 20, 2011
Recently Reed Hastings, co-founder and CEO of Netflix sent out an "apology" to his customers following a 60% price hike and subscription revamp. Since this new price increase I have heard that Netflix lost somewhere around 2 million subscribers, many of them long term patrons. Now it seems the explanation has to do with Netflix turning over their streaming option to some company called Qwikster, thus forcing customers to have separate entries on their billing statements, AND making them …
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William ()
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Please "Like" Film and Movies and Keep the Economy strong....LOL!!      My Interests: Movies, Anime, History, Martial Arts, Comics, Entertainment,Cooking, Things I don't … more
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[below is a copy of the Netflix co-founder's article]

Sunday, September 18, 2011

An Explanation and Some Reflections

I messed up.I owe everyone 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.I’ll try to explain how this happened.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming.Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.

When Netflix is evolving rapidly, however, I need to be extra-communicative.This is the key thing I got wrong.

In hindsight, I slid into arrogance based upon past success.We have done very well for a long time by steadily improving our service, without doing much CEO communication.Inside Netflix I say, “Actions speak louder than words,” and we should just keep improving our service.

But now I...
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