Netflix Veto’s the Qwickster Change, No Quick Anything
What a mess and complete waste of time and resources. You would think that Reed Hastings has been whisked away to another planet in the last couple of months. This has been the “Weirdest” shot at transforming Netflix. From a communications standpoint, I think that they have gotten this all wrong! Netflix creates a video apologizing and then after he says they have to communicate more they go and add Qwickster to their lineup not even asking subscribers what they actually thought of the process. I feel that a quick survey would have been a great idea for this approach to an operations re-organization. Did Reed and company have a meeting and say “I think this is what the people want lets give it to them? No I think not, They didn’t even plan because if they did it would have been clear that his is a bad decision to go with.
Netflix was doing such a great job allowing you to stream videos and receive DVD’s by mail that it was my favorite service bar none. Once they started to think they could increase shareholder value and split the two completely different services that costs almost double I lost total respect for Netflix nearly overnight. Was this even thought through? Did they at least do a dry run? It really is clear that they were doing this on a whim and they didn’t even write this idea out on paper and give it to some of their closest friends? I think this would have been great feedback.
What a complete mess this has been and the story gets better and better. If it were me working to do organize a big change like this, I would have made proper use of the blog technology and put up a poll to the audience to see what the subscribers think of the new idea. They would have been shot down at a moments notice.
The real idea here strategically would have been to cut the two services into two and place a monetary value into all of the services.
1. Streaming: 4.99
2. DVD shipping: 5.99
At the current price for 1 DVD and streaming it was around 10 dollars. You can’t just say overnight that the two services are worth almost double. If you are going to split up services, you have to put a value on the two services at the current cost. For example, $9.99 for streaming plus DVD shipping. What is the price that you are going to charge for the two services. Now what is the complicated thing about this? It is more simple than it had to be.
I think that by changing the services into separate services Netflix as a company is saying that people would want two different options and in some cases they are forced to make a choice, either both, one or none. I think that in the end the two services would equal out and in the same breadth you would be giving the consumer more choice. This is a bonus for the free market.
Overtime Netflix can raise pricing over the market basket inflation.
This decision to raise prices and split up services is a bad idea and I will tell you why. During this type of economy where people are struggling to make ends meet I think it shows that people thought of Netflix was a valuable service that was worth continuing to pay for when all other toy service and products must go. It was one of those caveats that if Netflix did have to stay extremely careful because the second you raised service pricing people would no longer need to have the service since the subscription was not a necessity.
Now Netflix has lost credibility as a company that delivers quality services. They are now less trusted as a result and this is going to be incredibly hard. When Reed Hasting video recorded the apology and explained the split, he said that he mis-communicated. What is going on now? Netflix is going to leave the two services alone because we the people were in outrage? Maybe you should check with your customers that pay you money to stay in business. In fact maybe all companies should be doing this more often. We the customer are the ones that pay your bills and salaries. I think all companies need to understand the importance of this in the capitalistic market. We do have a choice.
So what has changed since the inception of all this confusion? Really not to much! Times like this makes me wonder about executive bonus incentives.
The Official Netflix Blog
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