To All Blockbuster Refugees Considering Netflix

If you are a displaced Blockbuster customer and you are looking for a new home, you probably came across Netflix Underground while looking for information about Netflix.  If you are considering singing up with Netflix, make sure to do plenty of research before you give them your credit card or bank information.  If you browse through the years of articles on this site, you will find Netflix has a sketchy reputation built around more than a decade of sleazy corporate behavior.  Make a list of everything you hated about Blockbuster Online and multiply that by three. 

Yes, Blockbuster was a profoundly lousy company with many sleazy tactics, but many of their tricks in the DVD-by-mail business were pioneered by Netflix long before Blockbuster Online even mailed their first DVD.  If you are a Blockbuster refugee and you are considering giving Netflix a try, do yourself a favor and first browse this site or do some Internet searches with the following terms.

Netflix throttling
Netflix lawsuit
Netflix credit card charges
Netflix missing DVD charge
Netflix cancellation problem
Netflix delay
Netflix tactics
Netflix staging media event
Netflix price increase
Netflix shipping

What you will find will not be pretty, but at least you will be armed with some knowledge before making a decision that could lead to a lot unnecessary aggravation.

Qwikster? What Qwikster?

Netflix has done another 180. Customers got angry about all of the ridiculous changes at Netflix, and now Netflix is trying to un-ring the bell on the stupidest move the company has made in years.

Qwikster was ridiculed as a stupid name, but now the name seems sort of fitting, because the fledgling company did not last very long. The Qwikster spin-off (Netflix's answer to New Coke) proved so profoundly unpopular with consumers, Netflix scrapped the new company, which was really just Netflix in disguise. For now, Netflix plans to keep its DVD-by-mail and streaming services under one name and one Web site.

It is interesting to see how quickly Netflix will backtrack when the company realizes customers have become unacceptably angry. Also note Netflix did not kill Qwikster until well after the consumer backlash got out of control. The Qwikster name was already showing up in advertisements. It was practically a done deal. This mistake had to cost Netflix a lot of money, and it has cost the company a huge amount of credibility. The stakes were pretty high on this Qwikster launch. If the subscribers had not revolted so harshly, there is no doubt they would have gotten stuck with Qwikster.

If you were hoping Netflix is going to take back the 60% rate hike and two separate plans for DVD-by-mail and streaming, keep hoping. The higher fees and service split are here to stay. Although, past behavior indicates that Netflix will reverse its course if enough subscribers cancel.

Netflix has truly failed on this split of DVD-by-mail and streaming. What was once a beacon of innovation (for some) in the business world now looks like a sad, reactive, desperate, and pathetic company. With this whole service-split debacle, Netflix sort of came off looking like, well, Blockbuster a few years ago. Way to go, Netflix. Start imitating the company you once humiliated.

5 Netflix and Qwikster Alternatives

If you are looking for alternatives to Netflix and Qwikster, Jeffrey Van Camp at Digital Trends has a few suggestions in the article, "5 Netflix and Qwikster Alternatives."

Qwikster, the Netflix Version of New Coke



New Coke

 
On Mashable, Chris Taylor sums up what most marketing executives are probably thinking today about Netflix's horribly bungled launch of Qwikster. Yes, Qwikster just could turn out to be Netflix's New Coke.

"Qwikster From Netflix: The Worst Product Launch Since New Coke?"

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.

Alternatives to Netflix

With Netflix hiking prices aggressively, consumers are being forced to consider closing their Netflix accounts and finding better entertainment values from other sources. If you would like to help those soon-to-be-liberated Netflix subscribers, click on Comments below and post your recommendations for finding inexpensive entertainment while enjoying a Netflix-free lifestyle.

Get creative. For some people, one entertainment source may not be adequate. The best solutions probably involve combining multiple options to get the most for the money. Netflix competitors, downloads, used DVDs, kiosks, stores, Web sites, set-top boxes, pay-per-view, on-demand video, consoles, cable, satellite, DVRs, etc. are all on the table. Never has then been more ways to easily access millions of hours of entertainment. There should be excellent alternatives to Netflix for nearly every situation.

Greedier Than Netflix (for Now)

In, the movie, Wall Street, Michael Douglas (as Gordon Gekko) uttered his most famous line: "The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit."

Wow, that's great screenwriting, and it has some raw truth to it.  The quote also sounds like something one would expect to hear at a Netflix shareholder meeting.

On the topic of greed, many people feel Netflix is getting greedy by taking advantage of their huge market share and hiking fees on many subscribers by up to 60%. Netflix may, in fact, be a greedy company; however, in Netflix's defense, there are actually some greedier entities. Here is a partial list of those that may still be just a little greedier than Netflix.

• professional gamblers
• casino owners
• used car salesmen
• car dealership service advisors
• automotive finance specialists
• credit card companies
• two-year-old children
• drug dealers
• politicians
• bank robbers
• mortgage brokers
• Hollywood executives
• record companies
• pimps
• dirty cops
• third-world dictators

So maybe Netflix is not so bad. If Netflix wants to compete in the big leagues of greed, however, they will need to take things up a notch with at least one more big fee increase to gouge the subscribers. That just might put them over the top. Hmm, do you think Netflix will be able to hold off on that next fee increase until next year, or will they, in the spirit of competition, just go for it?

Canceling Netflix? You Are Not Alone

Angry subscribers warned Netflix, but Netflix did not listen. Netflix subscribers threatened to cancel their subscriptions if Netflix raised prices. Netflix raised the prices anyway, and many subscribers appear to be following through on their threats.

If you are one of those incensed subscribers and you are ready to exit Netflix, you are not alone. Read "Higher Netflix Prices Equals Fewer Subscribers" by Michael Liedtke for the details.

If the Netflix member cancellations continue, it could possibly become fashionable to drop Netflix. These customer backlashes tend to take on lives of their own and snowball. Just ask the last company who dominated the video rental business, got too cocky, and started screwing around with their customers. How did that work out?

With the added revenue from much higher subscription fees, Netflix may very well weather this storm, but the New Red Menace may have gone a bit too far this time. We will just have to wait and see how many subscribers are going to continue taking the abuse from Netflix and how many are going to find somewhere else to wait weeks for new releases, rent scratched DVDs, and have their ISPs and computers blamed for streaming video problems.

Notify Your Credit Card Company About Netflix Membership Cancellation

Even if you take great care to properly close your Netflix account, it is possible that Netflix may still try to hit you with additional charges after your subscription has ended. Netflix could make claims of an improperly closed account, missing DVDs, missed deadlines, etc. If this happens, you have the right to dispute the bogus charges with your credit card company, and, if you are a customer in good standing, there is a decent chance your credit card company could side with you.

You do not have to wait for a problem to occur to take action, however. If you are concerned that Netflix could hit you with bogus credit card charges after you close your Netflix account, you might consider being proactive and contacting your credit card company before you close your Netflix account. You can notify your credit card company of the date you plan to close your Netflix account and the date after which Netflix should not be billing your card. You could still get hit with additional charges, but you may then have a stronger case if you need to dispute any suspicious charges from Netflix.

Charges for "Missing" DVDs After Canceling Netflix

Too many people are making a costly mistake when canceling their Netflix subscriptions, and since there may be many Netflix membership cancellations between now and September, this is a very important special reminder to help save you from a nasty surprise after canceling your Netflix membership. If you read only one thing on this site between now and September, read this:

Absolutely, clear your Netflix queue of all DVDs and make sure all of your Netflix DVD returns have been acknowledged by Netflix before closing your Netflix account. If you do not take this precaution, Netflix may charge you for DVDs they claim are "missing."

Numerous former Netflix members have reported that Netflix charged their credit cards for missing DVDs after they properly closed their accounts and returned all of Netflix's DVDs. Unfortunately, Netflix is always in control of any evidence when this happens, so there is no way to prove the fraud.

Once you close that Netflix account, barring signature confirmation, you have no way to prove Netflix received all of the DVDs you returned to them. Netflix may claim you did not return your DVDs, and they may stick you with a charge of $20, $40, $60, etc. on your credit card. If Netflix does this to you, you may have little recourse. You will have to dispute the charge with your credit card company. If your credit card company does not side with you, you will be responsible for the additional charges from Netflix.

So, clear your Netflix queue, and return all of the DVDs well before your cancellation date. If all DVDs have not cleared your account, report them as missing before closing your account. If you really want to be safe, you might consider sending your DVDs back with signature confirmation. Yes, signature confirmation is a pain, but so is paying for DVDs you already returned. If you can produce proof of delivery, you will have a much better case if you need to dispute Netflix's charges with your credit card company.

Netflix Price Increase Marks a Good Time to Plan Your Exit

Exit Netflix Sign

Perhaps growing comfortable with their market share, Netflix has decided to dramatically increase prices. The new pricing structure will divide Netflix customers into two basic classes: those who stream video and those who receive DVDs in the mail. If you want to stream video and not receive DVDs in the mail, you will pay $7.99 per month. If you want to receive DVDs in the mail and not stream video, you will pay $7.99 per month. If you want to stream video and have one DVD out at-a-time, you will need to pay $15.98 per month for the privilege.

For some subscribers, this will amount to a 60% price increase. An increase of around $6.00 per month may sound manageable, but when considering that amounts to $72.00 per year, the cost becomes a significant issue. Also, consider that Netflix is a luxury expense. In how many areas of your life are you willing to accept a price increase of 60% on a luxury expense with no appreciable increase in service? For example, if you frequented a restaurant and it suddenly raised its prices 60% without improving the food or increasing the portions, how often would you return to that restaurant?

It appears Netflix is aggressively trying to discourage subscribers from renting physical DVDs. Netflix must really hate paying the costs of a DVD-by-mail business. Even though Netflix subscribers have become largely accustomed to being abused by Netflix, a price increase of 60% with no substantial increase in subscriber benefits seems a bit extreme and could be seen as almost a deliberate hostility toward DVD renters.

Assuming you've suffered some sort of dreadful head injury and you now wish to begin a new Netflix membership, you have no choice but to accept the price increases right away. If you are an existing Netflix subscriber, you have until around September to change your viewing habits or get hammered by the big increase.

You may have noticed that you can't spell "Netflix" without E, X, I, and T.  You may have also recognized it may be time to start looking for the way out.  Fortunately, subscribers have a few weeks to plan their exits from Netflix. If you are Netflix subscriber, and you wish to exit Netflix, you are advised to plan ahead. The biggest pitfalls to avoid when canceling your Netflix subscription are getting charged for extra months and getting charged for DVDs Netflix may claim were never returned or returned after the due date.  To minimize these possibilities, consult the cancellation procedure outlined at "Canceling Your Netflix Subscription."

If you put your Exit Netflix plan into place and properly end your Netflix subscription during the next several weeks, you can avoid the price hike and apply the money in your entertainment budget toward better values.

If you would like to help your fellow Netflix Underground readers by recommending some alternatives to Netflix and providing some other Exit Netflix tips, please click on comments below and post your suggestions.

El Netflix

No Stinking Badges Sign

Having suckered much of the United States and Canada, the New Red Menace is now setting its sights south of the border. Later in 2011, Netflix plans to make its streaming service available to forty-three countries in Latin America and the Caribbean.

Oh, these poor people have no idea what is coming their way. For you polyglots out there, how do they say "throttling" in Spanish, Portuguese, etc.?

Netflix Turns a Deaf Ear to the Hearing Impaired

Closed Captioning Symbol

There is a frustrated group of consumers who are not getting proper respect or attention from Netflix: the deaf and hearing impaired. Many Netflix customers with hearing impairments have been urging Netflix to improve resources for finding and viewing closed captioned content.

Apparently, Netflix has not been addressing these concerns with much energy or interest. Deaf people are complaining that Netflix does far too little to allow the deaf to find closed captioned DVDs on Netflix's Web site. Even worse, closed captioning on Netflix's streaming content is inadequate. Surprisingly, some content that has subtitles on DVD does not have the subtitles on streaming. In short, deaf Netflix customers are getting the shaft.

Here's the worst part. Netflix's pricing structure seems to be a bit more friendly toward streaming viewers while discouraging those who wish to rely on DVD-by-mail. Deaf people rely more heavily on DVD content, because DVD content is more likely to include subtitles. Based on complaints from deaf people, Netflix's streaming service is just not an attractive option for those who have hearing impairments and must read dialog.

Let's forget about the social issues and corporate decency here for a second. Maybe it just makes good business sense to serve the needs of groups with special needs like the deaf. Imagine if a company were to accommodate a demographic like the deaf. This could create a very loyal customer set that could provide many years of steady revenue.

Really, how hard could it be? A lot of content already has subtitles. Beyond that, automatic closed captioning technology keeps getting better. Why is this major technology leader, Netflix, not able to better incorporate these services into its streaming content? Maybe Netflix should look at the long-term marketing potential of making their services more accessible and accommodating toward the deaf.

Netflix Facing Class Action Lawsuit for Alleged Antitrust Violation with Walmart

No surprise, but Netflix is facing another class action lawsuit. This lawsuit is not due to anything you might have assumed, however. Rather than Netflix being sued over the company's wide array of suspicious business practices, Netflix is being sued for something the company allegedly did in 2005.

If you will think back to that time, Walmart was in the DVD-by-mail business. Walmart shuttered its video rental business and effectively surrendered its subscribers to Netflix. Netflix.com promoted Walmart for DVD sales. Walmart.com promoted Netflix for DVD rentals. It seemed like a wonderful marriage.

The plaintiffs are alleging that Netflix's CEO, Reed Hastings, met with the CEO of Walmart during that period, John Fleming, and conspired to strategically divide the home video market. According to the alleged agreement, Netflix would not sell DVDs (presumably new DVDs) if Walmart would agree to stop renting DVDs. That way, Walmart could secure a larger share of video sales and Netflix could secure a larger share of video rentals. Most importantly, the companies would not have to compete against each other and drive down each other's profits in price wars.

From a business point-of-view, this sort of arrangement makes perfect sense. Why fight your competitor in price wars over two different markets, when you can simply call a truce with your competitor that will allow each of you to have great control over an individual market? After all, as a business leader, which would you rather have: two highly competitive markets with low profit margins or one monopolized market with a high profit margin? If you do not have to compete as much, you can charge higher prices. Higher prices may hurt consumers, but higher prices normally translate to higher profits when proper competition does not exist in any given market.

The most important thing to consider about this alleged conspiracy is that it is most likely illegal under antitrust laws. These antitrust laws are in place to protect you, the consumer, from price fixing, collusion, and other similar predatory business practices. Walmart certainly did not want to be in a big trial over this. Walmart has already settled for an amount that may be $29 to $40 million. At some point, those included in the class action lawsuit will probably receive checks or Walmart gift cards as part of the settlement.

It is unclear what Netflix is going to do about this. Netflix is potentially just as guilty as Walmart in this alleged conspiracy. Netflix, however, may have much more at stake in this controversy. DVD sales makes up only a small fraction of Walmart's profits. If Walmart lost a lawsuit over inflated DVD sale prices, it would mean a hit against just one of its many businesses.

With Netflix, however, this is a different story. Netflix largely exists on video rentals. Videos are not just one business for Netflix, videos are Netflix's business. If the plaintiffs can prove Netflix has been able to charge inflated prices ever since the alleged Walmart agreement in 2005, the penalties could be tremendous. U.S. District Judge Phyllis Hamilton in Oakland, CA has stated, "As a result, millions of Netflix subscribers allegedly paid supracompetitive prices."

Think about the millions and millions of subscribers who have paid monthly subscription fees to Netflix since 2005. If Judge Hamilton or some other judge were to determine those subscription fees were inflated by just 10% as a result of an illegal pact with Walmart, the amounts could be staggering. The penalties could be crippling.

The federal trial is currently set for January 2012. Certainly, Netflix lawyers and managers are carefully debating their options. Netflix must tread carefully on this issue. Given this lawsuit could potentially involve every Netflix subscriber since 2005, even the slightest misstep could lead to a nasty stumble for Netflix.

Netflix Once Blamed USPS, Now They Blame ISPs

Netflix’s Chief Product Officer, Neil Hunt, has addressed Netflix streaming content problems on The Netflix Blog.

Many subscribers are suspicious that Netflix is throttling streaming content for heavy users. Netflix is flatly denying this practice, but the company has no credibility, because they have abused subscribers through throttling before and denied it.

Netflix’s denials of throttling streaming content are somewhat like the denials they used when they lied about their practice of throttling through the mail. Netflix used to blame USPS for the check-in and shipping delays for DVDs. We later discovered the fault largely did not rest with USPS, and the delays were mostly due to Netflix. Now that Netflix is being accused of throttling streaming content, Netflix is blaming the ISPs for the delays. First they blamed USPS, now they are blaming ISPs. We found out USPS was mostly innocent. What we will find out about the ISPs?

As of now, Netflix is on record as officially denying the practice of throttling streaming content for some users. If someone later finds Netflix is lying, there will probably be more lawsuits and ill will toward Netflix.

By the way, Neil Hunt’s most infuriating point in Netflix’s denial is that Netflix “hopes” to solve the streaming content problem by the end of the year. Why is this not a higher priority for Netflix? Netflix should be talking about having this resolved by the end of April.

Throttling Suspicions for Netflix Streaming Content

The latest controversy surrounding Netflix is about the throttling of streaming content over the Internet. Some Netflix subscribers have strong suspicions that Netflix is limiting their ability to view streaming content by forcing unusually long data buffer times that can force a viewer to wait for many minutes or hours before viewing a movie or show. Netflix and their defenders say some Internet service providers must be limiting their users’ data downloads through these buffer delays.

Regardless of who is causing these buffer delays, they are a problem, because they can greatly limit a Netflix subscriber’s ability to view streaming content. The real problem here is we do not know the true cause or culprit. We cannot trust the ISPs, because they are sometimes unscrupulous companies who hide behind technology and defend themselves with nonsensical industry lingo. We absolutely cannot trust Netflix, because, a few years ago, they were caught throttling subscribers through the mail and would not admit it until lawyers got involved.

Both the ISPs and Netflix have the ability to throttle customers and both could benefit by throttling. Since neither side can be trusted, throttled Netflix subscribers are in the dark. As of now, it appears that some Netflix subscribers who access streaming content might be getting throttled over the Internet. The question is: If this throttling is intentional, who is doing the throttling?

Click below to read Riyad Kalla’s article on The "Break It Down" Blog about streaming content throttling at Netflix.
"Netflix Throttling Instant Video Streaming Performance for Viewers"

Silverlight Instant Viewer Angers Some Netflix Subscribers

Slashdot is reporting an uproar among Netflix subscribers over Netflix’s instant viewer application, which is powered by powered by Microsoft's Silverlight.

Some subscribers are complaining the new player makes permanent changes to their media viewing options. Many are complaining the new player’s quality is poor and unacceptable. Some subscribers feel Netflix misled them into installing the player. What is your opinion of the Silverlight player employed by Netflix?

Rude Netflix Customer Service

In The Huffington Post, an article by Ron Galloway ("Netflix Death Watch") claims indifferent, arrogant, and rude treatment from Netflix customer service representatives. Have you noticed Netflix customer service representatives getting more unpleasant recently? If so, post your Netflix customer service story here.

"How to Get Revenge on Netflix" Article Link

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Canceling Your Netflix Subscription

The two happiest days of your Netflix membership are the day you begin your subscription and the day you end your subscription. There is an ugly and unexpected twist to this, however. A surprising number of former Netflix subscribers have reported that after they canceled their memberships, Netflix denied receiving their final DVD returns.

When Netflix denies receiving a returned DVD from a customer who has recently canceled, Netflix charges the former customer’s credit card for that DVD. This practice exposes the former customer to dozens of dollars in additional charges after their subscription has ended. Unfortunately, the former customer is left holding the bag and has the burden of proving that the “missing” DVDs were actually returned.

If you want to cancel your Netflix subscription and minimize your exposure to additional charges, consider following the steps below.

1. Determine your billing date by viewing your account information on Netflix’s Web site. Since Netflix cancellations are immediate and Netflix does not give refunds for partial months, you should plan to cancel shortly before your next billing date.
2. Several days before you cancel your Netflix subscription, delete every DVD from your queue. This should prevent Netflix from shipping more DVDs to you.
3. Send all of your DVDs back to Netflix. (Consider taking the extra precaution of sending these DVDs certified mail. Include a brief letter detailing the exact contents of the envelope. Keep copies of all documentation.)
4. As Netflix notifies you of receipt of returned DVDs, save the notification emails in case you need them later for proof.
5. The day you intend to cancel your subscription, check your account to see which DVDs have not been checked in by Netflix. Report any outstanding DVDs as lost. This should completely clear your queue.
6. Send an email to Netflix informing them that you are canceling your membership. This will create more of a paper trail. (Note: Do not tell Netflix that you are canceling because you were not getting enough DVDs. Netflix loves when heavy users cancel.)
7. Cancel your subscription using the Netflix Web site. Make sure to follow the on-screen instructions carefully.
8. Sit back in your chair, grin, and enjoy a beverage of your choice as you celebrate the end of the dysfunctional relationship you had with that company.

The main drawback to this cancellation procedure is that you will loose about a week’s worth of DVD rentals. Unfortunately, if you want to minimize the chances of getting hit with extra charges from Netflix after you cancel, you have very few options.

After you have canceled, carefully check your credit card statements. If Netflix still charges your credit card for missing DVDs (or any other unjustified charges), immediately contact Netflix via email to dispute the problem. If Netflix does not fully credit the unjustified charges to your credit card, contact your credit card company and dispute the charges. In many circumstances, your credit card company will reverse the charges.