An Apology from Netflix? Not Really

Like thousands of other Netflix subscribers, I received an e-mail this weekend from Reed Hastings, the co-founder and CEO of Netflix. It's starts off with, "I messed up. I owe everyone an explanation." He goes on to say that feedback from members over the last few months made it clear the company "lacked respect and humility" in the way they announced the recent DVD vs. streaming price changes.

Hey, Hastings, I didn't think you lacked humility or respect -- I thought you lacked an "I'm not going to gouge my clients if I can at all help it" gene.

He goes on to say that his biggest fear has been not making a successful jump from DVD to streaming. He wanted to make sure Netflix didn't fall into the same trap AOL did with dialup, that is, to ignore new technology and audience needs in a loyalty to keep established services afloat.

He says, "Companies rarely die from moving too fast, and they frequently die from moving too slowly."

I would add companies also die from taking their customers for granted.

According to his note, Hastings considers his key mistake in the recent price change/service separation announcement to be his lack of communication.

He goes on to explain -- again -- why separating DVD and streaming is necessary.

And is it just me, or do some of his statements sound like a death knell for Netflix's DVD service?

"DVD by mail may not last forever, but we want it to last as long as possible."

And, "We feel we need to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with our DVD by mail service."

Even if Netflix DVD service isn't being eliminated at this time, it is being rebranded -- the DVD by mail service will now be named Qwikster, referring to how quickly customers receive new shipments. (I might have named it something that referred to the product -- movies, but hey, that's just me.)

Hastings points out, "It is just a new name." Oh, and a new Web site. Customers will now choose their DVDs from qwikster.com. Video games are being added to the selection (good), but all interconnectivity with Netflix.com, which will now only offer streaming, has been severed (bad).

Hastings explains: "So if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn't show up on Netflix, and vice-versa."

Just to be clear -- as a Netflix customer, in addition to keeping my payment and contact info current on two Web sites, I will also need to visit two Web sites to make my viewing selections. If a DVD title I've been waiting on is added to the streaming service, the only way I'll know about it is to go searching on a second Web site. The price stays the same and I get to spend more time searching for films. In addition to all that, when I do get a DVD, a bright red envelope with the yuck-worthy Qwikster title will be hitting my mailbox.

I hate to repeat myself, but Netflix, WTF?

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