Dear Netflix (aka Qwikster?), Stupid is as stupid does... Rebrand Fail

By now my fellow Netflix members are aware of the added kink to the "Netflix" system since the 60% price hike announcement a few months ago. Netflix CEO Reed Hastings wrote a blog post and emailed an abbreviated version to subscribers this morning about the recent changes. He said the company (and him personally) behaved arrogantly and without consideration for the paying customers. He said he owed us an explanation as to why there are now two packages... not that it would have any affect on the price increase, he said.

 

He seems to think it's the separation of services that bothered us, rather than the money. He also assures us that this is actually a more cost effective model, and it certainly is... for Netflix.

 

But in his attempt to rectify that mistake, Hastings and his team decided to separate the company even further. In other words, he made the non-issue of "separate packages" equally as troubling as the increase in price. He says this solution will lead customers to be less confused. This implies that Hastings is operating under the assumption that Netflix lost 600,000 subscribers and $2.5 billion in market value because customers were confused by the changes. This is not the case. We understood very well: you took a service that was affordable and convenient, split it into two service packages that are both less convenient than my original singular package, and then charged me more overall. But that was all fine and well for those of us still willing to pay, because it didn't actually impact our service. Our accounts still operated the same way, our DVD and instant queues worked together, and life went on. But this changes things entirely. This means Netflix is taking away part of the convenience AND charging me more for the privilege of still using both.

 

I think Linda Holmes summarizes the situation best over at the NPR Monkey See blog:

"Hastings seems to be operating under the premise that customers don't really understand what's going on; that they are angry because they think that a single business has increased its price when in fact it has merely split into two businesses that charge separately. Presumably, the idea is that making the split more definitive will make people slap their foreheads and say, "Oh, now I see. Netflix actually lowered its prices, as long as I don't buy Qwikster! And new Qwikster is cheaper than old Netflix! I'm coming out ahead, sort of, if I don't want all the services I used to get!"

The only problems with this approach are that its underlying assumptions are almost certainly wrong, and that it ignores major inefficiencies that will be introduced for customers who do, indeed, want to continue to use both streaming and DVDs. Now, if you want both, you have to go to two different sites with two different queues, you have to pay two different charges to two different entities, and in general, you have to have two different memberships. That's not psychologically better for consumers. That's buying two things which are both less helpful than the single thing you could get before.

It's like a shoe company deciding to sell right shoes and left shoes for 12 dollars each where pairs of shoes used to be 20 dollars and thinking that consumers will notice the lower 12-dollar price but not the fact that it buys only one shoe."

No, Hastings, I'm not confused. I'm pissed. This means you not only support sudden (and large) price increases, you also think I'm stupid enough to believe you when you tell me it's not actually a price increase. 

Now it is no longer easy to track which DVD titles are currently available on streaming, a feature I *loved* because my DVD queue is soooo long. Sometimes titles would pop up that were available instantly. I would see that on my DVD queue, watch it instantly, and remove it from the DVD delivery list. Now I will have to manage two separate lists and check both sites before I have a DVD mailed to me.

On top of that, if we have to have two separate lists, how will the company's separate websites handle movie recommendations? Do my ratings for instant movies only help create recommendations for other instant options? Will my previous ratings of streaming and DVD titles be separated into two distinct profiles for recommendations?

It's ridiculous. I get that Netflix needs to market and plan differently for streaming versus DVDs, but they could have done that and kept the Netflix name for all their services. I was on board with the price increase, because I was willing to pay more to keep the same service (which I loved). I am not willing to pay more so I can play the shell game with DVDs. The only explanation I can come up with for this type of behavior is that Netflix actually wants everyone to drop their DVD memberships and solely support streaming.... and then down the road when enough people have eliminated the mail-order package, Netflix will drop DVDs entirely and jack up the streaming prices. I'm sure they see their DVD capital as a drag on their company's potential long-term growth... and since the red envelope is what the Netflix brand is famous for, they think renaming that part 'Qwikster' and rebranding 'Netflix' as streaming will help them down the road. The only problem with that logic, however, is that their movie choices on streaming suck. So, if anything, I'll keep the DVD package and stop subscribing to the streaming. There are WAY more choices out there when it comes to streaming, but far fewer options when it comes to cheap and easy DVDs.

RedBox and HuluPlus just got their biggest breaks ever.

Posted via email from Pass Fail Meter