Netflix sures loves being in the news these days. After their controversial announcement last month that their DVD by mail and online streaming services would be split into separate entities, the company has changed course and is reversing their decision. In a blog post published this morning, CEO Reed Hastings explains:
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.
This means no change: one website, one account, one password… in other words, no Qwikster.
Things first started spiraling out of control during the summer when Netflix unveiled their new pricing structure, bumping up the price for receiving both DVDs and streaming from $10 to $16.
Wall Street didn’t take kindly as the company’s stock plummeted below $150, after reaching an all-time high of over $300. As of today, the stock is trading at $111.62.
Back in September, I supported Hastings decision to break up DVD by mail and online streaming into two separate companies. It was a gutsy move but online streaming is the future. It may still be years from hitting mainstream, but taking the lead before others is crucial. As Hastings wrote:
Companies rarely die from moving too fast, and they frequently die from moving too slowly.
Netflix risked alienating a entire loyal customer base, with about a million already canceling their accounts after the pricing change. Unfortunately, in the aftermath, it appears that Netflix is having second thoughts and is holding off their proposed plans.
We hear all the time how important it is for businesses to listen to their customers. But at the same time, customers may not know what they want until they can see it and start using it. In the case for Netflix, the move was premature and poorly executed. Customers were rightfully outraged at the company’s apparent disregard and poor communication. As a result, Netflix soon became the butt of many jokes on the Internet, their brand being tarnished in light of their missteps.
Advice to Netflix: Get your shit together, and stop pissing people off.
Disclosure: I’m a virtual stock holder in Netflix.