So this Monday morning, I'm awoken to my dog, Pele, wanting to be walked. This is something that any dog owner can sympathize with. The sound of a dog panting and you can just tell that he's got enough energy to make Lance Armstrong say "ok ok I get it, I get it."
On our walk, I'm looking at my phone and I see I have an email from Reed Hastings, the CEO of Netflix. No, we're not good friends, but he did something that any good friend does, admit that he "messed up" and he "apologized" and that he "owed [me] an explanation."
Last week, it was released that about a million people cancelled their Netflix accounts out of anger towards the 60% price hike for receiving a DVD by mail and using the company's streaming service. Before September 1, when the price hike went into effect, Netflix offered a hybrid plan, where streaming only cost about $2 more.
The email explained to customers that management at Netflix did a poor job of explaining the need for the move. According to the letter, Netflix will now split into two different companies. One will be called Netflix, which will focus only on streaming movies and tv shows. The other, will be called Qwikster, which will focus only on DVDs by mail.
The letter explains that people who still have DVD by mail and streaming will now be billed twice, once from Netflix and once from Qwikster, instead of once for Netflix. You'll probably pay taxes on both. Hastings also said that Qwikster also will be offering video games my mail as well. Personally, I think the long term plan here is to sell of Qwikster for a few million.
To me, this move to move will do little to bring back the million people who've sought out different avenues for their home entertainment. A lot of people expressed interest in Amazon Prime, Blockbuster, Red Box, Hulu, etc, because Netflix's streaming service lacks a lot of newer titles. I just clicked over to Netflix and took a glance at the titles they're suggesting for me. They include: "The Gold Rush" starring Charlie Chaplain, "Dog Day Afternoon" starring Al Pacino, and "The Stranger" starring Edward G. Robinson. As great movies as these are, my question, and I'm sure the question that a lot of other people are asking too is, "Really? Why not Thor? Why not something that came out in the last couple of months? I'm not in the mood to watch a great movie from 1945 tonight."
I doubt that this letter will send that million people flocking back to Netflix, but it's nice to see a CEO admit when he was wrong.