Reed Hastings is Absolutely Insane
Not only is it a dumb name, but separating the two services is ridiculous. It had to be the answer to the question “What’s the worst possible thing we could do for business right now?”
Sorry. I’m getting ahead of myself. We all heard about Netflix recently separating their streaming and DVD services into two categories. I thought I was in the minority, & while slightly tweaked at the price hike… kept with the two now individual plans. I mean, I like access to the latest movies which are only available on DVD/Blu-ray. I also like being able to go watch some older films in an instant without any planning whatsoever, and the cool TV shows available like the BBC’s Robin Hood that I would have normally never seen.
I’m sure there are people out there who think the streaming plan is useless, have no idea what Blu-ray is, and just want their DVD’s. I’m sure there are people who want streaming movies… and probably can’t fathom why anyone would want physical media mailed to them.
I’m guessing that the same people who need a shelf full of 30 different kinds of peanut butter or an entire aisle full of bread varieties at the grocery store like to have options. We also like things that help us get organized.
Having an online queue of movies that I’d like to watch is pretty cool. Knowing that the same movie is available for streaming is also pretty cool. The lack of this will be the opposite of cool, and I don’t understand how Netflix doesn’t see this.
This is also one of the strangest emails ever…
From: “Reed Hastings, Co-Founder and CEO of Netflix” <firstname.lastname@example.org>
Sent: Monday, September 19, 2011 3:25 AM
Subject: An Explanation and Some Reflections
I messed up. I owe you an explanation.
It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.
For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.
So here is what we are doing and why.
Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.
I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.
So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.
It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.
Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.
There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.
For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.
I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.
Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.
-Reed Hastings, Co-Founder and CEO, Netflix
p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.
This message was mailed to [me] by Netflix.
(c) 2011 Netflix, Inc. 100 Winchester Circle, Los Gatos, CA 95032, U.S.A.
This is Charlie Sheen level insanity here. This may be even Gary Busey level crazy. (By the way, why is he in those creepy local Kia commercials?)
This long-form is even crazier: An Explanation and Some Reflections …along with this.
I’m going to go out on a limb and say that none of your customers think this is a good idea. Let me break it down for you:
- The price increase for the base plan was dumb. You realize that now. Why not fix that?
- A streaming-only service would be awesome… IF THERE WAS MORE CONTENT.
- Streaming newer movies would obviously be the biggest draw. Work out that licensing. I know it’s not simple. Figure it out.
- Streaming more content & more current movies would make me buy new hardware. Currently we stream Netflix through the Wii. If I could get more new movies… I’d upgrade to a Bluray player that does streaming at a better quality or something like the Roku 2 player.
- Old movies that are part of a series… only some are available. You can stream The Wrath of Kahn but not the entire Star Trek series? Dumb.
- Special episodes/bonus content of DVD’s not available for streaming. A minor annoyance, but still… Dumb.
- I don’t want two distinct services where there was once one all-encompassing service.
- One site to manage two queues is quite convenient.
- I don’t want 2 separate charges for 2 separate services where there once was one. I’m guessing no one else does either.
- I don’t want to figure out for myself what’s available for streaming & what’s available on DVD. Especially if I’m paying twice the price for the service.
Imagine going to your local pizza shop and they decide that they’re only going to do pizza because they do dough, sauce, & cheese really well. If you want any toppings, subs, bread-sticks, drinks, or a salad… you need to go across the street and buy them. Oh, now the place across the street sells wings too! They have separate menus… but it’s just across the street, so no big deal, right? Does this sound like a great idea, Reed Hastings?
[Woah – The Oatmeal read my mind!]