If you are a Netflix subscriber, then you know that back in July the company announced they would be splitting up their digital streaming product and their direct-mail product into two companies. The name of the new company? Qwikster. The idea behind Qwister was simple for Netflix: create a separate offering for customers who are only interested in direct-mail DVDs, and in turn change the structural direction of Netflix moving forward to focus solely on streaming media.
This announcement was met with nearly universal criticism, as it amounted to charging existing customers of both services – $8 for each service instead of the previous $10 – 60 percent more on a monthly basis!
Well, today Netflix announced Qwikster is DOA. No mas. Not happening!
STORY: Netflix Unveils Quikster
What does “universal criticism” mean? Well in this case it wasn’t just consumers tweeting about being really mad, and Techcrunch writing seething reviews of Qwikster (the name of the new direct-mail product), it actually meant a 50 percent decrease in the price of Netflix stock!
Well, as all GlobalGrind readers know, if there is one thing that CEOs cannot have it is their paper being f*cked with. So after a few months of getting slammed — and losing a lot of money — Netflix is now backtracking and apologizing to customers!
“Consumers value the simplicity Netflix has always offered and we respect that,” said Netflix co-founder and CEO Reed Hastings. “There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”
Coinciding with Hastings’ apology was an announcement from Netflix that let customers know that the price change will remain in effect (boo!) but the two services will no longer be separate for customers. This means that if you subscribe to Netflix and want both streaming and direct-mail service you still have to pay $16 (the July price hike), but Netflix promises no more price changes.
The question is: Is the damage already done? With over 1 million less subscriptions forecasted at the end of last month, Netflix is taking a serious hit, and keeping the $16 price-point isn’t much of a solution for angry customers, but is it enough to bring down the giant?
What do you think Netflix should do to “apologize”? One month of free service? A trip to Disney World? A Margiela for all? Tell us what you think!
