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Netflix CEO Explains Price Increase, Renames DVD Service

After a nearly inexplicable 60 percent price increase in July 2011 was followed by a drop in customers, Netflix CEO Reed Hastings has written an apology and explanation that was posted on the company’s blog and sent to all customers in email. In it, Hastings reveals that Netflix will be separating the DVD and streaming sides of the business even more, rebranding the DVD-delivery service to “Qwikster.” Responses (over 10,000 so far) on the company’s blog seem to be universally negative, with customers expressing unhappiness (to put it mildly) with the future separation of services and the pricing. Might be time for Netflix to consider an about-face before it’s too late.favicon follow link


Comments about Netflix CEO Explains Price Increase, Renames DVD Service
(Comments are closed.)

Keith Berner  2011-09-19 17:22
Thanks for this, Reed. It was with great delight that I cancelled my subscription to your woefully under-supplied streaming service yesterday. What you have apparently failed to realize with your dramatic price increase (never mind the arrogant, clumsy way in which it was handled) is that you have fundamentally broken your bond with your customers. Where movies-at-home and Netflix were once synonymous in my and others' minds, it will no longer be so. Sure, I'm sticking with your Qwickster service for now (stupid name, by the way), but I'll be on the constant look-out for a competitor's service that can substitute. Netflix in my mind is now just another rapacious corporate monster that I'll be rooting against and will leave for good as soon as I can.
Kenneth Prager  2011-09-19 17:36
Two things came to mind as I read their CEO's idiotic post:

1) "Have I fallen victim to Adam's best ever April Fools joke?"

2) After remembering that it is not April 1st: these moves will be used for business school case studies on how to destroy a company for many years to come.
How to destroy a company overnight! I can't believe no market research was done for something this important!
Scott Rose  2011-09-19 18:15
This actually isn't Reed Hastings' fault. It's my fault... my apologies. I explain all in this video:
Adam Engst  An apple icon for a TidBITS Staffer 2011-09-19 18:46
Jeez, you should know better than to give executives acid!
James Courtice  2011-09-19 21:45
This is as good a time as any to cancel my subscription. Given the difficulty of playing a Netflix DVD and the increase in price for the service , I,ve finally had it.
I just joined and for the first time actually searched movies. The selection on streaming movies is pathetic and I will be on the look out for a more fairly priced service. Netflix or Quickster as you like to call it is a good band aid until I find something better. My suggestion would be to offer more content for the money.
Louis Sohl  2011-09-20 03:21
I have been a netflix customer for 3 years. I cancelled my account this weekend in total disgust!
Rob Prout  2011-09-20 04:12
Why not continue to offer free streaming but increase the minimum plan requirement? I would change to a 2- or 3-disc minimum plan that included streaming and the corporation would increase revenue. OR increase the streaming content in anticipation of the USPS' imminent demise.
Adam Engst  An apple icon for a TidBITS Staffer 2011-09-21 14:36
For a graphical version of what most customers feel... :-)
Dumped the DVD side of netflix and picked up on Blockbusters DVD/Blueray service at$14 a month.. no Blueray upcharge and can exchange at the local store if you want something else now. I kept the netflix streaming for now. But if Blockbuster figures it out and gets streaming up properly I'll probably switch to that as well.. Nice going Reed! I've been a customer since inception and your blatant disregard for your customers has killed my support for Netflix.
Curtis Wilcox  An apple icon for a Friend of TidBITS 2011-09-30 19:07
That's inaccurate. Blockbuster's 2 disc plan is $14.99 and includes Blu-ray and video games. Netflix's 2 DVD plan is $11.99 and its 2 DVD+Blu-ray plan is $14.99.

The local store swapping feature is nice if you have one. There isn't a Blockbuster in my city, there's one over 6 miles from me in a suburb which would be very convenient even if I had a car.