Monday, October 10, 2011

Netflix Changes Its Mind Again And Says No Qwikster


Moments ago, I received an email from Netflix stating that "DVDs will be staying at Netflix.com." Below is the entire message:
Dear Damond, 
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. 
This means no change: one website, one account, one password…in other words, no Qwikster.
While the July price change was necessary, we are now done with price changes. 
We're constantly improving our streaming selection. We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.
We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows. 
Respectfully, 
The Netflix Team
For those complaining about the split between DVDs and streaming content, this ought to make them happy. However, this recent switch has me thinking about Reed Hastings judgment.

To hear some tell it, Reed's moves were genius. Looking at many of his earlier decisions, while unpopular at the time, they turned out to be just what the people needed. Investors agreed.

With the latest price increase and separation of services, this again was announced as unpopular but necessary for future growth. Why then would the company go back on its game plan? They were aware that some customers would leave and complain, but they should have stuck with their guns and rode it out.

Today, my confidence in Netflix is shaken. Does Reed really have a game plan or is he just doing what's popular? With similar deals like the one recently announced with AMC, many people would have soon forgotten the DVD business and gone all streaming. At least, that's what I planned to do.

What Netflix just did was show its cards to all of its competitors, investors, and customers. The company blinked first and showed us that its scared. Until this email, I believed that Reed and the other executives at Netflix knew what they were doing. While somewhat random, I relied on their intelligence to make decisions based on the facts. If we don't watch that many DVDs and its hurting the company, separate yourself.

Right now, I'm second guessing everything I've been told about Reed and the future of Netflix. Are they scared of the Dish Network, Amazon, Blockbuster, YouTube, and Apple? If not, then why give in to what you know isn't right. The company made a decision and they should have stuck with it. Period.

Maybe I'm totally off base here, but that's my view. What do you think? How does this latest news affect you? Are you happy or is it just too late for Netflix? Let me know in the comment section below.

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Damond L. Nollan, M.B.A.

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