Netflix CEO Had Me, Then Lost Me, Then Kind of Had Me Again, Then Really Threw Me Off For a While

Posted: September 19, 2011 in crotchety ranting, Jeff Holland, Threat Quality
Tags: , , , ,

It’s always nice to wake up to an apology email. Well, nice, and also a little disconcerting because I JUST woke up and what the hell happened in the last seven hours that Netflix CEO Reed Hastings feels the need to tell everyone he’s sorry?

Well, turns out he was sorry for that whole business where Netflix jacked up prices and made people try to choose between streaming and DVD-by-mail. Which, turns out, just made a lot of people remember that they don’t actually NEED Netflix in their lives, and also sent stock down by about 15% and…

Look, Reed Hastings is sorry you didn’t get what they were doing there. Not “Return prices to original plan” sorry, but sorry enough to explain. And it started out great:

I messed up. I owe everyone an explanation.

Good stuff! OK, let’s keep going. 

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) because they are afraid to hurt their initial business.

Excellent so far – tying Netflix’s concerns into notable public failures anyone can understand.

In hindsight, I slid into arrogance based upon past success.

Well…I suppose you shouldn’t be quite so hard on yourself, you are running a business, but let’s move on.

Inside Netflix I say, “Actions speak louder than words,” and we should just keep improving our service.

By, say, improving your streaming catalogue so that it’s comparable enough to the DVD content so as to make the choice between the two services a lot easier on current subscribers, instead of forcing them to choose between things they WANT to watch (on DVD) and things that are AVAILABLE right this moment (on streaming)? So that, when the time did come for subscribers to make a choice, it wouldn’t have been like someone ripping off a band-aid they didn’t even know they were wearing?

Like that?

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

Wait, slow down. I liked DVD by mai –

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.

Wait –

So we realized that streaming and DVD by mail are becoming two quite different businesses, with very different cost structures, different benefits that need to be marketed differently, and we need to let each grow and operate independently.

OK, this I get. Makes perfect sense. Continue.

Another advantage of separate websites is simplicity for our members. Each website will be focused on just one thing (DVDs or streaming) and will be even easier to use. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated. 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.

Your definition of “easier” intrigues me, Reed.

There are no pricing changes (we’re done with that!).

Hahaha – wait, you’re totally not really done with that, are you.

Andy and I made a short welcome video. (You’ll probably say we should avoid going into movie making after watching it.)

Hahaha – wait, I thought you guys wanted to go into movie making. I remember that being kind of a big deal a few months ago. Didn’t you snake a TV pitch from HBO or someth – Ohhhh.

Our view is with this split of the businesses, we will be better at streaming, and we will be better at DVD by mail.

When were you not good with DVD by mail? I’ve had a subscription for like eight years now, it’s been pretty consistent. Were you sacrificing hobos to please the Postmaster General or something just to get things to me a day earlier? WHAT AREN’T YOU TELLING ME.

The additional streaming content we have coming in the next few months is substantial, and we are always working to improve our service further.

So, I should stay with streaming, because eventually it might have the content that I could access on DVD in the first place? How optimistically vague.

Both the Qwikster and Netflix teams will work hard to regain your trust.

Whoa whoa, Netflix can get my trust back, but who’s this Qwikster? I NEVER SEEN HIM BEFORE. HE A COP?

Actions speak louder than words. But words help people to understand actions.

That is a pretty good working definition of the word “words,” yes.

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