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Co-founder of Netflix's so-called apology

Netflix's apology for their 2011 price increase.

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A Quick Tip by stormtamer

  • Sep 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 go to a completely different website if/when they want to watch movies online. As far as I can tell, this "apology" and explanation were nothing more than damage control.  Lately I have had huge issues with movie streaming via Netflix, so unless Qwikster's quality control standards are substantially higher, I will drop streaming completely.
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September 21, 2011
That's really too bad to hear. So many of my friends have been raving about Netflix for years!
September 20, 2011
And there's always Redbox Video and Amazon Streaming.
September 20, 2011
Actually it makes sense to me. I appreciate that the CEO was willing to talk more directly with the subscribers. And Quikster IS Netflix, just a better way to separate out both services.

Decades ago CBS had separate divisions for their radio and television branches. Clorox has separate divisions for its products. It's not unheard of. If anything, the media is making a big deal out of nothing.

I don't agree with the low score in this tip. Netflix provides a great service that I find enjoyable and convenient, much more so than Blockbuster ever was. I hope this new adventure of theirs is more productive and will help the consumer by giving him/her more viewing choices.

I do not use the streaming video that much, preferring the DVDs, but that's just me. I mail out the used ones, they immediately send me out an email with the new DVD, and away I go. No late fees like Blockbuster.

When I get ISP messages, I just switch to Firefox and it's all good. 
September 21, 2011
I realize this is a small thing in the greater scheme of life. What got to me was the way all this came about. First they announce the price increase, but as far as anyone could tell at the time, there didn't seem to be a reason for it. There are a lot of things on Netflix I'd like to see streamed, (it would be great to be able to watch Criminal Minds and CSI online instead of having to suffer with Megavideo) but it's not like they've added a ton of new content. Every so often my subscription price has gone up and I never thought anything about it, but I was a bit annoyed when I read an article on Yahoo Business where the person being interviewed couldn't answer the reporter asked why such a drastic price change. To many people it just sounded a lot like "because we can." The fact that Hastings talks about streaming and DVDs being different doesn't make sense to me. They've been doing this same thing for quite some time. And as far as having two websites being easier, that doesn't make sense either. I don't mind paying extra really. What bothered me was the chaotic delivery of the new changes. I'm not saying they don't deliver a great service. In fact they do, although I don't know why I should have to get a new browser just to stream to my PC. It's mostly about principal. Many customers feel the same way I do. Just hop on over to IGN or CNET and read the responses to this. I read a comment recently from someone who has been with Netflix almost since day one, and he has decided to cacel his subsription entirely. And I'm sure you have heard how the company's stocks took a nose dive after this announcement.
I agree with William. If Hastings, or some other higher up would have just been honest from the get go no one would've given it a second thought.
September 21, 2011
I see what you mean; they clearly could have handled it better. The apology may have been a "too little too late" thing. But it was not so upsetting that I would cancel my subscription. As for your tech problem, I don't know if that is a site problem or a connection problem. Thanks for the comments!
September 20, 2011
Yeah, I got his 'letter' yesterday. He stated that they are also adding games with the dvd/bluray thing under Qwikster....it was pretty weak. The two site will be linked actually in your queve if you have the option now but now, I have to deal with two charges? I was fine with the price hike since I used to pay $ 19.99 for 3-at-time anyway (I downgraded to 2/time with streaming), but now, I am not happy with the two charges! Now I am pissed, I wasn't going to cancel but now I just might. I wish someone would be a direct competition so they'll shape up.
September 20, 2011
Blcokbuster online is not an option for me...they suck more LOL!
September 20, 2011
You know, this new restructuring really puzzles me actually. It seems like a huge company like Netflix should be able to integrate all their services, but instead they split them? It doesn't make sense. And about the games, why not just buy Gamefly? Isn't it the gaming equivelant of Netflix? Personally, I think things were pefect the way they were. And this issue with streaming (the movie will start, and then I get some message about something being wrong with my ISP, which is crap) really gets to me. Instead of adjusting to my net speed like it used to, I have to reload my browser every time.
September 20, 2011
Yeah, I know what you are saying. No one likes changes, but I guess all we should do is vote with our $$. I mean Netflix losing about more than half their subscribers, their shares have plummeted, and while I understand their changes, I just don't get the separate pricing. I do stream on occasion (the app is on my internet-ready TV), but I prefer the dvds anyway.

I guess it was a way for them to be more profitable; in splitting up the service between Quikster and Netflix, that may mean more leverage in wallstreet. But honestly, I think they just tried to save face. People felt they were misled, and they should've been honest with their plans.

As for someone saying that the media is making a big deal out of nothing...the CEO should've explained all this beforehand, and not make more changes after their shares have plummetted. It is a big deal.  The low score on this tip is not about the service after all (yes, it is still a good service), but an expression of your displeasure of the changes and the so-called 'apology'..not the service. There is no right or wrong here; you write what you feel. Someone needs to understand that...

Netflix streaming competitions:
amazon: $ 1.99-5.99/movie
Redbox: is a different animal really...$ 1/day
video on demand comcast: 2.99-6.99 depending on the movie
There are also Hulu.com and others, but I am not sure...
September 21, 2011
I know about Amazon having movies. I like a monthly service though because it's easier to keep track of my spending. I've been to Hulu, but I do not want to sign up for something like that and take the chance they won't have what I'm looking for.  Redbox would be ok if I could go out and get the movies myself, but I'm disabled and cannot drive. I'd have to ask someone else to get them for me, which would just make life that much more complicated. I live with my mom, and she does enough for me as it is. As far as comcast, we have only one box in the house to cut down on the bill. In any case, you're right. The timing of this blog post was terrible. Because of that, that's why I did not feel this was a genuine apology, but more damage control than anything. I do admit though, I am glad about the clarification.
September 21, 2011
Yeah. right now, I have until the 28th to figure out what I want to do. It is a good service, so I think I''ll stick with dvds for now. I guess now, the Netflix app I have in my internet TV is not going to be used. The thing is, I feel that the customers were screwed, yes , they were given praises by some because of this business decision, but I think adding the games was just a cheap excuse.
September 21, 2011
I knew I forgot to mention something. I don't have an internet ready TV, but I do have the Netflix app on my phone which I do use when I'm not at my PC. I wonder how that will go, if it will simply be renamed or if I'll have to wait for a Qwikster app. Hmm. Not knowing the inside details of all this has me confused on some things... Someone at IGN commented that this will put Gamefly out of business. I guess we'll see.
September 21, 2011
Steph, I did a short review...er...rant about this topic. LOL
More Netflix's Apology For Price In... reviews
review by . September 21, 2011
posted in WHAT CAN I SAY?
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 …
Quick Tip by . October 04, 2011
posted in WHAT CAN I SAY?
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 27, 2011
This is a lame attempt to try to "correct" a lame decision. Where is New Coke when you need it? It is great when people follow Peter Finch's (Network) advice and tell businesses "we're not going to take it anymore."
About the reviewer
Stephanie ()
Ranked #141
I'm one of those people that prefers status quo to randomness and chaos. I have two dogs, a Chihuahua and a German Short-haired Pointer, named Chiqua and Pepper. Chiqua is my constant companion.   … more
About this article


[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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