Netflix split fails to convince

Sunday night, Reed Hastings, the CEO of Netflix, apologized in a letter posted on the Netflix website about the way he communicated the company's price changes this summer.

Sunday night, Reed Hastings, the CEO of Netflix, apologized in a letter posted on the Netflix website about the way he communicated the company's price changes this summer.

He said he “messed up” and he owes “everyone an explanation,” but he never actually apologized about the 60 percent price increase; he just said he should have explained it to consumers in a better way.

He also announced the company's new plan to separate the by-mail and streaming divisions of Netflix into two businesses, and, in my opinion as a loyal Netflix user, I think he's messing up again.

Under the new arrangements, the mail service will be called Qwikster and the streaming feature will remain as Netflix, but on the surface there is no logical reason for the split. By separating the businesses, consumers will have to have two separate credit card accounts and pay two sets of bills.

With the influx of bills most people have to pay today already, why would Netflix burden its customers with one more bill per month, especially when the company has recently lost a significant amount of business?

From the Times:

That 60 percent increase has cost the company about 1 million of its 25 million customers, a greater exodus than they expected, company representatives have said. Netflix shares fell 15 percent last week when the customer figures were announced.

Aside from the annoyance of adding another credit card bill, it is unrealistic to think the Qwikster service will flourish when Blockbuster offers the same feature. The only thing separating Blockbuster and Netflix was the streaming service, but now Qwikster and Blockbuster are one and the same.

Also, Marc Lumpkin, a spokesman for the Dish Network, which now owns Blockbuster, told PRWeek in July the video rental company will look into providing a streaming service in the future.

Another reason Qwikster seems a silly idea is because the company didn't check to see if the Twitter handle was taken before coming up with the new name, and it just so happens a man named Jason Castillo, according to Mashable.com, already has the @Qwikster handle.

Unfortunately for Netflix, Castillo isn't tweeting about movies and subscriptions—he focuses on marijuana and swears.

Apologizing isn't a new thing for Hastings. In September of last year, according to FastCompany.com, he issued an apology for hiring actors to pretend to be excited about Netflix at a launch event in Canada.

Perhaps Qwikster will take off among consumers, but my hunch is that next September Hastings will be ruing his words once again.

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