I’m going to take the unusual move and post, below, and almost complete cut and paste of a piece of corporate informational mail from Netflix. If you are Netflix user, you’ve already got this in your email box, most likely. Before I do this, I want to explain why.<\/p>\n
I’m not shy about critiquing corporations on this blog, but there are three things that compel me to be supportive of Netflix at this moment. I will add a bad thing or two about Netflix as well for those of you who hate kittens.<\/p>\n
The first thing is that Netflix is not Blockbuster; Netflix is not obnoxious and evile like Blockbuster, it provides a better product, it is what Blockbuster should have been but was not smart enough or perhaps too greedy to be, and Netflix took a big chance with a totally new business model and made life better. Especially for me because I’ve never had very many friends and don’t get out much, so the little DVDs that came in the red envelopes were like my friends. Later, when Netflix started the streaming service, I still kept around a few DVDs (they were my friends, after all) but then I was able to not even have to go out to the mail box (which is down the street). So I could go out even less. Netflix became even better at enabling my hermit-like existence.<\/p>\n
The second is that I think that Netflix has gotten the shaft lately when they changed their pricing policy. I had this big argument with all my in-laws all at once. Even my in-law’s in-laws were in on it. As a rule they all have higher end cable or satellite (or both) hooked up to 20 foot wide TV’s and surround sound. I estimate the annualized cost of hardware for the typical system as being at least $240. The cable and\/or satellite costs must be between $100 ad $200 a month. And they still go out to movies to the tune of at least $40 a month. The change in Netflix price structure that occurred a couple of months ago when they separated their DVD service and their streaming service was less than $10 a month.<\/p>\n
$20 + $150 + $40 >> $10. Yet, they spoke of Netflix as though it had crushed a puppy in front of a school yard of 6th graders. Apoplectic. Spitting, even.<\/p>\n
I noticed a similar sentiment in various snorking arenas as well, especially on G+ for some reason.<\/p>\n
I’ve told everyone in person why they are wrong about this, about how this is nothing like what Comcast or some other cable company might do to them in a given month’s bill without them even noticing or complaining, but no one listened. Very unfair. I realized that the reason people were mad is not because of the money, but because of the way Netflix made the change. More on that in a moment.<\/p>\n
The third reason I’m supporting Netflix is that they’ve actually been very responsive to me. A few times I’ve complained about a technical problem with a feed, and they took money off my monthly bill. Once, on this very blog, I complained about an illogical feature of their Interface, and they totally changed their interface to exactly what I suggested. (I have it on my list of things to do to have Amazon change their interface next. I’ll keep you posted on this.)<\/p>\n
There are down sides to Netflix. And, in fact, I’ve complained about them more than I’ve praised them<\/a>, but that’s because this is a blog and that’s what we do here. In particular, I’m annoyed that the Roku uses Linux (which is good) but streaming on a computer requires Windows and In the meantime it appears that Netflix has realized what I realized the moment I saw it: The change in pricing structure was not bad and demonstrated, if put in perspective, that Netflix was actually NOT doing what the cable and satellite services were doing. But, people didn’t get that in part becuase Netflix told people about this policy in a way that made people mad, even though the change is not particularly enraging. Thus, the Netflix price structure change was a failure in … well, framing<\/a>.<\/p>\n So, Netflix has a new strategy: They are actually splitting the streams into two distinct things, with two different names (one being Quikster, thus the title of this post). And, they are trying to make the whole situation more clear and more palatable. And, they’ve apologized for saying it wrong the first time around.<\/p>\n Pursuant to this, Netflix’s Reed Hastings has written the letter to which I refer, and a blog post. The letter is below, and the blog post is here<\/a>.<\/p>\n <\/p>\n \nDear Greg,<\/p>\n I messed up. I owe you an explanation.<\/p>\n It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.<\/p>\n For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.<\/p>\n So here is what we are doing and why.<\/p>\n Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.<\/p>\n I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.<\/p>\n So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.<\/p>\n It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.<\/p>\n Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.<\/p>\n There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.<\/p>\n For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.<\/p>\n I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.<\/p>\n Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.<\/p>\n Respectfully yours,<\/p>\n -Reed Hastings, Co-Founder and CEO, Netflix\n<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":" I’m going to take the unusual move and post, below, and almost complete cut and paste of a piece of corporate informational mail from Netflix. If you are Netflix user, you’ve already got this in your email box, most likely. Before I do this, I want to explain why. I’m not shy about critiquing corporations … Continue reading Goodbye Netflix, Hello Qwikster. And not really goodbye Netflix<\/span> Internet Explorer<\/del> some Windows-only softare and does not work on a Linux computer. And in fact, with this presentation of a Pro-Netflix blog post, I will renew my efforts at biting at their heels on that issue.<\/p>\n