Netflix subscribers woke this morning to an email from CEO Reed Hastings which begins as a heartfelt apology and quickly spirals into yet another knife in the back for the company’s beloved DVD by mail service, which is now being spun off onto its own service as -- wait for it -- Qwikster.
Once the darling of Wall Street and customers alike, Netflix appears to be doing everything they can to crash and burn these days. Aside from recent price changes that effectively double the monthly cost for users of both streaming and DVD, Netflix continues to test the patience of its customers with bizarre moves such as dropping the saved section of their streaming queues in the last week.
Based on an email from CEO Reed Hastings sent to subscribers in the wee hours of Monday morning, the company appears poised to add another death by a thousand cuts to its members, announcing that the DVD service that launched the service into the hearts and minds of consumers will be spun off and rebranded as Qwikster, while the Netflix name will continue as a streaming only enterprise.
Hastings’ email begins with the promising, “I messed up. I owe you an explanation,” but quickly spirals into more bad news for fans of the DVD by mail service.
“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,” Hastings explains. “That was certainly not our intent, and I offer my sincere apology.”
Claiming the name Qwikster was chosen “because it refers to quick delivery,” Hastings explains that the new website will launch in a few weeks, where DVD members will go to access their DVD queues and choose movies -- which sounds like a further headache for subscribers who have both DVD and streaming, since they’ll no longer have notification when a disc-only title becomes available for streaming. “A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated,” Hastings explains.
It’s not all bad news, however, as Hastings claims the company is done with pricing changes and will be adding an option for Wii, PS3 and Xbox 360 video game rentals on Qwikster, similar to the company’s current solution for Blu-ray discs.
“Both the Qwikster and Netflix teams will work hard to regain your trust,” Hastings concludes. “We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.”
Hastings has posted a longer version of his email to subscribers with a video on the company’s blog, which is also open to comments -- and those should make for an entertaining read as the news spreads.
Follow this article’s author, J.R. Bookwalter on Twitter
delric
October 06, 2011 at 3:52pm
Well it looks like Netflix has once again, I should say we'll once again screw us customers over. I spoke with the Netflix customer service rep earlier today about my accounts. I was trying to find out if they increase the number of simultaneously streams. I was told no you only allow one per account as of now. but Netflix will be introducing plans that will allow more multiple streams at one time. I responded back and said isn't this just great you got rid of the DVDs just to increase the price back up to the price of what DVDs with the streams pricing.
mad48
September 20, 2011 at 9:54am
The Netflix letter claimed there would not be further price increases beyond those already announced. However, I'm including part of a reply I tried to send back, and yes, it got an "undeliverable" bounce as I suspected it would. There doesn't seem to be a way to send email to Netflix.
[Quote from Netflix letter:] "The benefits of our streaming service are really quite different from the benefits of DVD by mail."
[My response:] No kidding- the DVDs usually work; the streaming service, not so much. Constant "loading" pauses, lots of which never end, at least on my Roku ... and those of a lot of other Netflix customers.... [I included a link to a Roku forum as evidence.]
I should note, and have told Roku, that I've found this annoyance to be almost exclusive to Netflix streams. I rarely have a similar problem with Amazon Instant Video, even of the same movies/episodes.
Loup407
September 20, 2011 at 2:33am
This email would make sense if it was April 1st, but now one can assume that Netflix is run by idiots. It's a shame. Good luck, Reed, in your next job.
Philodina
September 19, 2011 at 3:13pm
Somewhere in all this it must make sense to Netflix, or Qwikster, or whatever. What's the rationale? Seriously.
frigmous
September 19, 2011 at 2:22pm
Do you think Qwikster will add streaming after Netflix is driven out of business? Maybe I'll sign up then, since I dropped Netflix after their last chucklehead move.
scotty321
September 19, 2011 at 11:10am
This actually isn't Reed's fault... it's this guy's fault:
youtube.com/watch?v=ziOpcodkupw
MacMike
September 19, 2011 at 10:30am
They pushed out the Blockbusters and other local video rental places by under cutting them. Now that they've done that they're raising the prices. However, don't forget there's Redbox, Amazon streaming and other services hot on the heels of Netflix. With this terrible business strategy they could effectively eliminate their loyal customer base and reduce their own relevance to obscurity.
