Might be time to admit that you were wrong, Netflix!
Earlier this week, we were NOT pleased to learn that Netflix decided to split their DVD-by-mail and video streaming services into two separate entities.
As is to be expected, there was LOTS of backlash from critics and customers…and now Wall Street is telling Netflix that they messed up!
Here's what Pacific Crest Securities analyst Andy Hargreaves had to say about Netflix's big business mistake:
"Netflix's recent price changes, followed by the separation and rebranding of the DVD business, have increased (subscriber turnover) and damaged the brand value. We expect near-term uncertainty to persist until the direction of content negotiations and competitive offerings becomes clearer."
More from Janney Capital Markets analyst Tony Wible:
"We believe the loss of $9 billion in market value rests with the CEO and believe one of the only ways (Netflix) can reverse momentum is to change management and reverse much of what it has already committed to. Frankly, we do not believe (Netflix) is likely to take these steps. The management has not shown to care about investors or its customers."
Bummer. Here's more from Morgan Keegan analyst Justin T. Patterson:
"We see little reason to create a new brand unless Netflix was intending to ultimately spin-out the Qwikster business. The friction of using both services could cause more to downgrade or even cancel their service."
And because we're so disgusted with Netflix, we've included even more criticism from Wall Street analysts AFTER THE JUMP!
Do U think that Netflix screwed up? Do U think there's any chance they'll give their customers what they want???
Here's Merriman Capital analyst Eric Wold on Netflix's screw-up:
"(For investors), we continue to recommend staying on the sidelines until the near-term uncertainties lessen. Our concerns…remain in place and we believe (subscribers) will continue to seek out a less-expensive option in general and especially within an economic environment where fixed costs are being cut by household budgets."
More from Caris & Co. analyst David Miller:
"We also have a problem with (Netflix's) decision to enter the videogame rental business…the beauty of filmed entertainment, as we see it, is that it is a long-lived asset exploitable in multiple windows. Audiences of the series Seinfeld, for example, can still find virtually the same entertainment value in watching that show today versus its prime almost 20 years ago. The same cannot be said for video games, which find obsolescence very quickly."
Wake up, Netflix! Seriously…
Tags: analysts, customer, dvd by mail, mistake, netflix, qwikster, screwed up, video streaming service, wall street, wrong, wtf