Netflix axes Qwikster, Users Rejoice

When I saw the title for this blog post, my finger couldn’t click on that link fast enough. As a Netflix subscriber, I was beyond irked when I read last month about the company separating its DVD and streaming services into two separate entities. If you’re not familiar with the situation, in early September Netflix CEO, Reed Hastings, announced that the nearly 10-year movie rental service would be dividing its DVD-by-mail and video-streaming services into two separate businesses – and charging different fees for each.

This came only shortly after Netflix announced a gasp-worthy price hike this summer. Originally, subscribers were charged $10 dollars a month for both DVD-by-mail and streaming options, but then this summer Netflix announced it would be raising that rate by a whopping 60% to $16 a month instead. Naturally, users did not receive this information well.

Come September, Hastings is telling customers 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.” Again, users were unhappy (see: P.O.’d customer comment below for a giggle)

Thankfully, Netflix came to its senses and announced in a press release this morning that it will give Qwikster the book and keep Netflix as a video-streaming and DVD-by-mail service. Hastings stated, “Consumers value the simplicity Netflix has always offered and we respect that. 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.”

This is a great example of the old adage “If it aint broke, don’t fix it.” Netflix had a great concept, capitalized on the new age of DVD rental, built its fan base – and then decided to change its structure. Whoops! What Netflix should understand is that its users are, for the most part, loyal. As much as they complained about the price changes, they would have kept subscribing. I did. And what it lost in some subscription cancellations it would most likely regain once the streaming database expanded and provided a much greater variety of movie and TV titles too good to pass up. All 6 seasons of LOST are available to stream, so I’m sold.


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