Netflix: Making things more complex and inconvenient isn’t the answer

Over the weekend, Netflix CEO Reed Hastings apologized for hubris in the way Netflix rolled out its pricing changes a few months back and announced plans to separate their DVD-by-mail service from their online streaming video service.

The streaming service will be called Netflix. The DVD service will be called Qwikster.


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On one hand, the split makes sense

With two separate companies, it’ll be easier to wind down the DVD business and eventually spin it off or sell. In the meantime, the split allows the two very different beasts to be managed and marketed more effectively. I get that. It’s all about lifecycle, baby.

On the other hand, WTF

As a customer, I now have two separate businesses to deal with. That means:

  • Two different accounts.
  • Two different bills.
  • Two different websites.
  • Two different queues.

Rather than make things more convenient, the plan is to make it even harder for customers to manage their queues because now we’ll no longer know which DVDs waiting to be shipped are available for streaming.

Wait. Video games are coming to the DVD service?

Who cares? That’s value I wasn’t looking for. Which, you know, makes it not value.

Critiquing the apology

Reed’s apology was average — and this is coming from me, someone who knows a thing or two about apologies to customers.

Pros: He acknowledges his own pride and arrogance, explains his position, and uses pretty clear language and examples.

Cons: He fails to express any empathy for the customers and what they’ve experienced for the last several months. And then, on top of that, he repeats the same actions that caused the mess in the first place.

No, they didn’t raise prices again. But what he outlined makes things worse for customers without offering any real value in return. That’s the core customer complaint from Round 1 and Netflix repeats it again in Round 2.

The impact on me, as a consumer

To date, I’ve held onto the DVD portion of my Netflix package. But this has convinced me to drop the DVDs and, at least for now, hold onto the streaming.

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Christopher Cummings

Blogs about product management. Loves Jesus, his family, comic books, video games, and giant robots. Occasionally crawls through mud and leaps over fire.
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