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Remember the Netflix price changes that got everyone upset? For many, the new prices went into effect a few days ago. Netflix decided to respond to the outrage late yesterday with an apology… and what can only be described as the world’s most confusing business decision.
You can read the official announcement here but it’s rather long so let me give you the tl; dr version. Netflix is going to change their signature service, DVDs by Mail, to an entirely new separate company called Qwikster and add an option to upgrade your account for a fee to also rent video games by mail (which, may I add, Blockbuster by Mail gives you in their base price without the need for an extra fee). The original Netflix brand will become a streaming only service. I actually read this the first time through with the assumption this was just a joke, this idea seems so out of left field.
Complaints are already rolling in. People are mad that they’re making things twice as complicated. They’re mad that the two proposed site will be run like totally separate businesses with very little integration and info sharing between the sites. (No sharing reviews and ratings between DVD and streaming? What sense does that make?) How this will actually work in practice remains to be seen but it certainly does seem like they made an already unpopular decision and made it even worse.
From a business standpoint, I can’t help but think that most customers would have forgiven the price increase in time but now you’ve given them a second thing to be upset about instead of just letting them quietly come to terms with it. While splitting the business may have been the right decision in the first place, they should have announced this with the price change, not afterwards like it’s a consolation when it really just makes the issue that much more complicated. When your customers are freaking out about a change, changing something else is rarely the way to fix it.
The one good thing in all of this is, as a customer who was dropping DVDs by mail for a streaming only existence, I felt even better about this decision after reading this update. The fact that the streaming service is the one that keeps the Netflix brand name says that they see that service as the future and are throwing their weight behind streaming to a greater extent. It gives me hope for even better streaming selection and service in the future even if I find the rest of the decision to be incomprehensible.
But that’s just me. What do you think? Does this announcement make things better or worse in your mind?
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Hey Hillary, as you might imagine this is getting a lot of play in my niche (classic movies).
Personally I thought the original split was implemented sloppily, though not a complete disaster. I did think it was a little foolish that they didn’t offer some sort of combo deal for subscribing to both services–I guess this latest announcement would be a good part of the reason why. I had decided to drop the DVD by Mail plan prior to the first announcement–I found they just sat on top of my TV for months at a time, while I always had something streaming on my desktop when working, just for the background noise. What I heard a lot of after the first change was either 1) People said no big deal, it’s still a bargain, or 2) People who dropped one of the two services and then saying they were rethinking subscribing at all. Netflix made them think and the thoughts were, I can live without this.
Now this latest “apology” seems to have been a complete disaster as the splitting of the two sites has angered those who were okay with the previous price hike. By physically splitting things apart Netflix has interfered with the way people had been using the site for years and instituted more work for their subscribers. You know time is more valuable than money.
My personal use of streaming has reached a point where there isn’t much left for me to watch. I’m probably going to drop the service in the coming months for either Amazon and/or Hulu and other services just to get some new programming. I’m not angered by what they’ve done as much as mystified, but by dropping the DVD by Mail service before all this I’ve been pretty much immune to their changes and botched announcements–it’s been pretty interesting to watch without really having a stake!
What boogles my mind is that if they had just waited, people would have forgotten/forgiven them the price change in the first place and then, much later, they could have quietly renamed one half Netflix by mail or something and then whatever new stupid name they wanted. Both the timing and the logic behind this make no sense to me.
But we too are 100% streaming now. The rare movie we actually care to see that not on instant watch we’ll get at RedBox.