After hiking the price of their joint DVD mailing and instant streaming service without any knowledge from their customers, Netflix recently announced that it will be splitting into two separate companies. It will continue to offer its internet streaming service under its original name and logo. As of last week, it has decided to offer its original service, DVDs through the mail, under a new name and company, “Qwikster.”
I recently received the following stock e-mail from Netflix co-founder and CEO, Reed Hastings: “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. 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.”
I myself have been a devoted Netflix member for over 4 years. I was thoroughly excited at the prospect of their instant streaming service, and their ability to continue their great customer relations and low prices. Unfortunately, I do feel that the recent chain of events and consistent lack of dialogue with their customers has shown little respect for the immense member base that has led to their tremendous success. I only learned of their sudden price increase due to my credit card bill showing that my Netflix charge had almost doubled. Moreover, there was no response to this price increase for almost an entire month.
The mass generated e-mail is a gesture in the right direction, I suppose. Netflix’s actions have gone against even the most basic rule of customer relations: the customer comes first. I wonder now how important customers truly are to the company’s overall vision, and how many the past few months of conduct will cost them.
What do you think about Netflix’s recent split?