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

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.

Awesome.

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’.