Netflix Fail

Reed Hastings just can't win. Yesterday, the Netflix CEO sent out a mass email to all Netflix customers to "apologize" for the rushed, poor communication about the services price increase, and the failure to communicate clearly about the company splitting in half. The apology was prompted by a wide-ranging, mass rage prompted by the horrible and abrupt changes made at Netflix.

If you're not familiar with the Netflix split, let me briefly explain. They are going to have a separate company called "Qwikster" that is going to be the DVD mailing service. "Netflix" will become the streaming only service. This is a service that allows you to stream movies and TV shows to your computer, certain devices that connect to your TV, iPads, and many mobile phones. Another change to Netflix is the 60% price increase they implemented not too long ago.

As a movie blogger, I know you giant hoard of loyal readers are hanging on my every word, hoping that I'll weigh in on this issue. Well, wait no longer! As a subscriber to Netflix, I have my opinions.

First, I think splitting the brand names is a bad idea. I'm sure there are a handful of reasons why they're doing it. And, it's NOT for the sake of customer service. It is to benefit the people at the top of the company, to the detriment of customers. My reasons are only speculative, but they are as follows:

Reasons they are splitting the company in two:

1. They expect the streaming business to grow quickly.

2. They expect DVD usage to fade out, like VHS or disco music.

3. Some people at the top of the chain did some wheeling and dealing, and someone made lots and lots of $$$$$$$$ through the change.

The problem is, the Netflix brand has a recognition. They basically have a monopoly on Internet movie rentals. This has made them arrogant and careless with the brand. However, the Netflix brand has something rare and wonderful: icon status. Like "Apple", or "Coca-Cola", Netflix has an emotional appeal to its customers. It has a unique place in the market, and people love it. If they split that up, and make two different companies, it will greatly weaken their appeal.

Splitting the companies is not a useless idea, however. I just think it's too early. They need to wait two or three years, when their streaming catalogue has grown. Right now, they only have older TV shows (with the exception of the first 2 seasons of Damages, Mad Men, and very, very few others) and obscure older movies that no one wants. However, I am an optimist, and I am hoping that when Netflix becomes a streaming only business, they will vastly expand this catalogue. Otherwise, NO ONE will pay for it. It's barely worth having now, as it is.

So, that's my two cents. They have not handled things well at Netflix. I am still a subscriber, but I am waiting to see what happens with the split. Many, many other subscribers have quit the service altogether, choosing to use Redbox, or some other form of online rentals. I'm not ready to jump ship yet, but I'm keeping an eye on it. Leave comments and let me know what you think.