The Dark Side of Netflix

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Netflix Quickly Takes Cover with Qwikster

Facing an overwhelming backlash from subscribers, Netflix CEO, Reed Hastings has come forward and apologized for what has probably become the biggest public relations debacle in the history of Netflix.

When Netflix abruptly spilt its DVD-by-mail service and streaming video service into two separate services and effectively increased subscription fees by 60%, many--perhaps millions--of Netflix's subscribers became angry and threatened to close their accounts. Arrogantly, Netflix did little to manage the crisis. Netflix's attitude seemed to be: We are the leader in the video rental business. If you want our services, you will accept delivery however we choose, and you will pay whatever we tell you to pay.

Netflix did not use those exact words, but that is what the public heard. Rightfully so, the subscribers rebelled and began canceling their subscriptions.

Under such pressure, one would assume Netflix might retreat and come up with a plan to assuage consumer anger, but Netflix did not do that. Sure, Reed Hastings/Netflix apologized for being arrogant and communicating poorly, but that is about it. In a further act of arrogance, Netflix has chosen to rename its original DVD-by-mail service and permanently break it off from Netflix (as if that will fool enough people).

The new name is Qwikster. Yes, Qwikster is a cheesy hipster appellation, and this playfully misspelled name is so 1990s. Sure, Qwikster sounds like some shady file-sharing Web site from Romania, but it is actually a repackaging of Netflix's DVD-by-mail business.  (Yes, this probably will fool enough people.)

If you want to be a member of Qwikster, you are going to have to pay for it, and it will show up as a separate charge on your credit card each month. Even if you maintain a Netflix subscription for streaming content, your credit card statement will have a charge for Netflix and another charge for Qwikster.

Adding to the inconvenience for subscribers, Netflix and Qwikster are to function independently. For example, if you review a movie on Qwikster, the review will not appear on your Netflix account, even though you may be paying for both services. Also, if you need to update your credit card information, email address, home address, phone number, or other account information, you will have to do so twice: once on the Netflix site and once on the Qwikster site.

Some consumers may feel more comfortable with paying for two subscriptions when the subscriptions are under different names, but the reality has not changed. Netflix has reduced subscriber benefits and is charging significantly more for significantly less. If making payments under two different company names makes subscribers feel better about it, then so be it.


BigE_Garufa said...

I agree this is just another blooper by Netflix. They should drop the DVD service altogether and concentrate on ramping up the streaming service with better and deeper selection.

Anonymous said...

Can you say "Redbox"?!

Anonymous said...

You have to be kidding me! I checked the calendar. It's not April 1!

I want to go to one site, Netflix, and manage my streaming and my DVDs. I also want to get recommendations for TV shows and movies regardless of whether it will be streaming or via DVD. Clearly, this is the first step (well, 6th or 7th) in closing down their entire DVD operation.

It's all such a shame. Netflix really had something. It's now going the way of the VCR, which really says something!

Anonymous said...

I am really upset with these new changes and the arrogant attitude of Netflix. My first choice would be to do the streaming but some popular shows are DVD only. Now I'm forced to have both the steaming account and DVD account, paying more than I feel we should. Now you're telling me I will need to log onto two websites to manage my streaming and DVD accounts? Have mercy on us, please!