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.

Netflix Bets on Gullible Canadians and Ignorant Americans, Eh?

Netflix has apparently grown bored with tricking Americans. Now, the Red Menace is spreading to Canada. Netflix is off to a wonderful start up there too.

According to The Canadian Press, to drum up Canadian interest in Netflix, Netflix hired actors to pose as Netflix fans at a publicity event in Toronto on September 23, 2010. Some of the actors gave interviews to reporters. They did so, because Netflix instructed them to show enthusiasm, "particularly if asked by media to do any interviews."

Certainly, the press is upset about the trick. Netflix is apologizing for the hoax, stating that it was improper. According to Michael Liedtke of the Associated Press, Netflix spokesman, Steve Swasey, even tried to float the excuse that this was all an accident, arising from a fake documentary they needed to make to qualify for permitting. Now, that is a weak excuse. Netflix was probably just trying to fool the Canadian public, and things just backfired on them when the actors broke cover and exposed the scam.

What is wrong with the corporate culture at this shady company? Is Netflix honest in anything they do? Why does this company have to trick people to generate interest? If Netflix will do stuff like this to attract customers, what are they willing to do to existing customers?

Here is some honesty for you. Canadians are getting streaming Netflix service at a cheaper price than Americans. When Etan Vlessing from The Hollywood Reporter asked Reed Hastings, "Are you concerned that American Netflix subscribers will look north and ask for the same discount Canadians get at $7.99?"

The Netflix CEO and founder, Reed Hastings, responded, "How much has it been your experience that Americans follow what happens in the world? It's something we'll monitor, but Americans are somewhat self-absorbed."

So, Netflix does not want to give you American subscribers the same discount as they are giving to the same Canadians they just tried to fool with hired, fake Netflix fans. Reed Hastings thinks his company will get away with this pricing disparity because, apparently, Americans are too self-absorbed to know what is going on in other countries.

Hastings may very well be right about the ignorance of American Netflix subscribers, but do you want to do business with a company run by a man who has so little respect for you that he will publicly suggest you will pay higher prices because you do not know any better?