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Netflix To Split Into Two Companies, Still Doesn't Understand Their Customers

| Filed under: Icky Icky PooTech TalkSad SadBusiness Blitz

WTF Netflix Qwikster

Netflix. Stop it.

Just stop.

People woke up this morning to a late night email from Netflix chief executive, Reed Hastings, explaining that they messed up. Which is great, and it's great to hear they recognize that.

But what good does recognizing it do if they don't do anything about it? In fact, they seem to be making it worse:

Under the new plan announced Sunday, the two services will still be split – and the announced price changes will remain. What changes, however, is that the services will become two separate entities with different names and separate lines on customers’ credit card statements. Beginning in a few weeks, there will be Netflix, the video-streaming service; and Qwikster, the DVD-by-mail company.

“[W]e realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently,” Hastings wrote.

Or, you could keep it the same, start adding better titles to streaming, get rid of the waiting periods for title releases (we understand this is partly on the production companies, but how about some negotiation?), and stop requiring certain parts of TV seasons to be "only available on disc." Once both sides of the streaming and physical disc coin get better, do the price bump that's worth it — so we're getting even a little bit more for the more money, not less. Then add the video games as a higher priced option.

At the basic of it: if you wanted to keep what you had, Netflix will now bill you two separate times (under different names), force you to log into two different services, and make things less convenient (will we have to search two different sites for availability now?) for the same price hike.


Also, Reed, it's interesting that you cited Borders in your explanation letter — which we all know has gone out of business. Everyone can read the letter here, and see people reacting.

We understand the need to grown and make money, but in this economy, a second price hike in a year — and a 60% one — is not the way to do it. And making things more difficult for your customers to get what they pay for is just kinda mean. Think about the timing.

Keep your customers happy and don't forget that we're the reason you guys exist at all. Just look at your numbers.

How do U feel about all these Netflix shenanigans?

PS: "Qwikster" is a dumb name. Just sayin'.

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29 comments to “Netflix To Split Into Two Companies, Still Doesn't Understand Their Customers”

  1. frrf says – reply to this


    lol and perez hilton is a good name?

  2. 2

    Re: frrf – oh wow frrf, you must be so intellectually advanced to come up with that stinger. Really I'm floored.

  3. 3

    wow this going to make even more easyer for me, so i will never have to come back …… thanks Netfilx for even more bad news….

  4. 4

    We just added streaming back to our Netflix account and are happy with it. There are more shows and movies available and it's more affordable than paying for digital cable.

  5. 5

    Totally stupid name. I was considering keeping them even after the price hike. But after hearing of the split and 2 separate charges, fuck that! Im out. Goodbye Netflix

  6. 6

    LOL at perez giving business advice when everything he has tried outside of this website has failed.

  7. kham says – reply to this


    I agree the name is stupid, but the reason he cites Borders is because they didn't evolve. He is saying he wants to do the opposite of them…not emulate them.

  8. 8

    I'm sure they're going to offer a really low subscription to rent games which spells trouble for companies like Gamefly. I don't know why everyone is in an uproar. It's freaking cheap people. Compared to cable, satelite, just about everything else it is still cheap. These type of people will cancel netflix then go out and buy an SUV and drive 60 miles round trip to work everyday. Idiots.

  9. 9

    Netflix is going to end up not existing in the near future.

  10. 10

    I hate perez, BUT I agree with everything he says including the new name lol netflix please stop screwing up.

  11. 11

    Yes Perez, Reed does cite Borders, but you completely misinterpreted what he said about them. He wasn't praising their business; he basically says they went out of business because they WEREN'T on the cutting edge, which is what Netflix IS trying to do. Learn to read.

  12. 12

    oh, and p.s…….that wasn't an apology!!!!!!

  13. 13

    I canceled Netflix and now get TVDevo for streaming Movies and TV. Also use Redbox for new release movies. Good solution.

  14. 14

    u know there just making it worst it just takes money out of your for just moviesQwikster wtf sounds like some kind of mailing name.

  15. 15

    All the people bitching are REALLY going to be bitching when they have to pay movie theater ticket prices and late fees at blockbuster. Oh god, logging in to two different websites is SUCH a pain. Come on.

  16. 16

    I'm totally canceling my subscription to their company now. I was thinking about it since the increase, I just forgot to return my dvd's in time and ended downgrading to one dvd by mail and streaming but this was the last straw. Thats to them all the video rental business went bankrupt and now there getting there own payback.

  17. 17

    but can you really forgive them for being so EVIL? They intentionally made their prices soo cheap that it eventually bankrupted every Blockbuster and local video store. Then, aftter they all closed down, guess what?! THEY JACKED UP THEIR PRICES AND DECREASES THEIR SERVICES. How royally f*cked up was that?! It almost sounds like Wallmart (but at a much smaller scale)

  18. 18

    now we all feel guilty for all the scratched up netflix dvds we found at the bottom of our drawers and said got lost in the mail.

  19. yeez says – reply to this


    Have people really gotten so lazy that logging onto TWO websites is just way too much work?

  20. 20

    What he is saying in the e-mail makes perfect sense. Yes there are some people who use both services, but a majority of the people only took serious advantage of one service. Therefore, to separate them into two different companies so they could focus and expand on each is a great idea. So they name isn't great… but seriously, how many companies do you know where you initially hear the name and go 'wow thats great!'. Blockbuster, bad, redbox, bad, perez hilton, bad etc etc. If you actually read the e-mail and not just Perez's horrible and inaccurate recap of it, you would realize it is smart business sense. And for those complaining about the price - I am a broke grad student and I know that even with the price increase it is still the cheapest around. If you actually have very little money you realize how much is. I doubt the people complaining are actually people who would be affected.

  21. 21

    Netflix is dumb, I can't believe them changing the whole system because they are money hungry. All Redbox has to do is offer a home streaming option for $8 and keep the boxes to rent physical disc for $1 and Netflix will be wiped out, they are trying to make money out of starving Americans, way to do your part Reed Hastings. Go REDBOX!

  22. 22

    I agree "Qwikster" is a dumb name you think the name be similar to netflix of course I don't see the reason to split and have the disc service be called something else. I think the whole split thing is stupid plus it is interesting that they only brought up the "Qwikster" thing until after the price was raised and the drove of customers that left after it.

  23. 23

    What's with America and not wanting to pay for anything? Netflix is much more expensive in Canada and no one up here is complaining! We also pay between 15 and 30% income tax. Most of you only pay 15%. If you want your country out of the shitter suck it up and stop being such cheapskates.

  24. 24

    Re: jillybeanxoxo – You seem to be the only one bitching just because we don't pay as much income tax as you and that neflix is cheaper here. We are complaining yes cause the raise in price seems without reason. The service appears unchanged now if the raise in price came with a better service and more titles for disc and Watch Instantly. I think even people in Canada would be reacting in the same way if Netflix raise your prices and it wasn't made clear before it happened and the service did not have improvements accompany the higher price.

  25. 25

    It really gets down to pleasing customers and listening to their concerns or risk losing them. In relation to Perez, I am baffled about the many complaints from readers accusing Perez of not being nice. If you want nice, subscribe to Reader's Digest. Perez, just post the information and let the readers form their own opinions and allow them to express it. Turning comments off is your way of arbitrarily protecting certain individuals and not others. Let the readers express their views and refrain from focusing on being nice. Nice guys always finish last.

  26. 26

    It's pretty obvious why Netflix is doing this. Netflix has become like any other finite technology service- there soon won't be a need for it anymore. Like Borders with books or AOL….Save yourself the headache and cancel.

  27. 27

    Omg you guys. Do some research. Netflix isn't changing their prices because they are "money hungry evil bastards"… THE MOVIE COMPANIES WANT MORE MONEY FOR THEIR MOVIES!! If Netflix doesn't increase their prices, they can't pay the movie companies and then we will have no movies.

    The movie companies have seen how successful Netflix idea of movie streaming has been and want to paid more… Get mad at the movie companies! Netflix is doing the best they can to keep the prices down!

  28. 28

    It isn't essential services people… consumer is key, to0 expensive and annoying? Spend your money elsewhere. Personally I am cancelling them because it was a better idea than it was a service. the movies available OnDemand plus free cable movies on demand fill my need. Buh bye… PS we use gamefly - anyone else know of a better service for just games?

  29. 29

    Well, there goes MY account. I canceled it when I lost my job, but I was going to reactivate it as soon as I started working again. With all these changes, however, I think I'll just stick with Redbox and Blockbuster Express.