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Netflix Loses 800,000 Subscribers After Qwikster Gaffe 325

Posted by Unknown Lamer
from the rebranding-gone-wrong dept.
bs0d3 writes "Netflix's video subscription service lost 800,000 customers in the third quarter, the single biggest loss in its history. Shares plunged by more than 25 percent in Monday's extended trading. Netflix is predicting that its combined loss of customers and European launch will push it into the red next year where it may stay for all of 2012, according to a letter to its shareholders (PDF)."
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Netflix Loses 800,000 Subscribers After Qwikster Gaffe

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  • by elrous0 (869638) * on Wednesday October 26, 2011 @09:36AM (#37843246)

    I didn't bitch about the price increase. I understood that one at least. With the big studios demanding more and more money for streaming their content, that was inevitable. And I *love* the streaming BTW. I think streaming was their best move in years. It's especially great for TV shows (which would take forever to watch if you had to get them one disc at a time). Where else can you stream the entire run of Battlestar Galactica (in HD, no less) for $8 a month? Louie, The X-files, Family Guy, Firefly, Lexx, BSG--my queue is filled with many days worth of geek greatness. And some of the content on there isn't available in HD in any other format.

    But the Quikster thing really left me scratching my head. Now various theories have been floated as to why they did it. My own personal belief is that they were planning to break Quikster off and then sell it (to focus exclusively on streaming). But whatever the case is was a truly bonehead move from the consumer perspective, especially coming so soon after the price increase. The fact that the CEO responded to the issue of customer anger at the announcement press conference by basically saying "Huh, well, we hadn't thought of that" didn't exactly make it look like a well-thought-out move.

    I think Netflix needs some new leadership. Keep the streaming, lose the dumbass moves.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      What made sense to me was that as two distinct companies, Netflix and Qwikster could negotiate contracts separately, getting more streaming options for Netflix subscribers.

      • by jedidiah (1196)

        ...except that tosses any advantage that Netflix had straight out the window.

        Don't like the slow turnaround of the USPS? Then use streaming if available.

        Don't like the weak streaming selection? Then use the disk service.

        It was the perfect set of tandem options that could cover everything and take up the slack for the flaws of either.

        As long as Netflix has another option, they can always turn their back on a bad deal.

    • The leadership has been making a lot of bad decisions. Outside of the whole "Quikster" fiasco, the next worst decision they made was to play ball with the entertainment industry when they demanded more money. The Netflix competition right now is nowhere NEAR them. Netflix is literally on 95% of my home internet connected devices. From my Tivo, to my TVs, to my PS3, and 360. Etc. Netflix needs to expand its offerings. If they lose movies, then start adding games. They can also push into the adult movie indus

      • Re:I agree. (Score:5, Insightful)

        by TheRealFixer (552803) on Wednesday October 26, 2011 @10:11AM (#37843620)
        They really should have taken a page from Apple. When the music labels tried to strong-arm iTunes pricing in the early days, Apple just laughed at them and said "No. You'll take what we give you, and you'll like it." They could do this, because the iPod, and thus iTunes, was by far the most wildly popular digital music platform in the world, and they knew they had all the bargaining leverage against the labels that they needed

        Netflix is in the same boat. They are far and away the biggest streaming platform around, wildly popular, and almost ubiquitous at this point. At least in North America. Who can compete with them? Blockbuster? Their platform is a joke. Hulu? Nextflix is (was) not much more per month, and Hulu still forces ads on you and has asinine and frustrating device playback restrictions on certain content, mainly because they're run by the media companies. Netflix should have all the muscle needed to force their way around the studios.

        What they lack, is a strong personality like Steve Jobs in their leadership, who had no issues playing hardball with anyone, anytime.
        • Re:I agree. (Score:5, Insightful)

          by haystor (102186) on Wednesday October 26, 2011 @10:19AM (#37843730)

          iTunes was able to negotiate price because they were by far the second most popular method of getting music. The most popular by far was copying (not sharing) music for free. People were still going to buy Apple's hardware whether Apple had a music store or not. Netflix doesn't have that luxury. They must have the content or else they will have nothing to sell.

          • by DJRumpy (1345787)

            Your examples are a bit off. For starters, Apple doesn't own the content they sell. They contract to sell it just as Netflix does. Their businesses are the same in that respect. Netflix is also the most popular streaming company out there but the number of folks who stream is probably still dwarfed by those who use phsical media.

            Regarding the hardware, I think you were trying to indicate that Apple has a large hardware prescence (iPod/iPhone/iPad/Mac) that hooks directly into iTunes. That is also true for N

        • Apple had other revenue sources. If netflix decided to play hardball and lost, they'd be back to DVDs only, or would have to test that "Were playing a DVD in our warehouse, and streaming it to you" thing, which I believe is currently illegal
        • by elrous0 (869638) *

          Agreed about Hulu. They're the closest competitor to Netflix streaming and they make you pay the same pirce as Netflix, but still force *ads* on you. And their library is still not even *close* to Netflix's to boot. They're a joke. Not sure why anyone in their right mind would subscribe to them. About the only thing they have going for them is some NBC and Fox shows' more recent episodes. Whoopty-do.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          Netflix is in the same boat [as Apple].

          No they're not. iTunes Music Store had a power that Netflix lacks, due to the iPod. The iPod had success regardless of the iTMS and yet also encouraged people to use iTMS. As long as Apple mobiles have a large-enough marketshare (and I think that while it will continue to shrink it will effectively never fall below a viable niche) iTMS is guaranteed to be a major player.

          Netflex may not have serious competitors, but they can have competitors. There's no real barrier

        • Re:I agree. (Score:4, Insightful)

          by LateArthurDent (1403947) on Wednesday October 26, 2011 @02:25PM (#37846918)

          What they lack, is a strong personality like Steve Jobs in their leadership, who had no issues playing hardball with anyone, anytime.

          Uh...from what I hear, they did play hardball. And Stars said, "ok, bye".

          The movie industry saw what happened to the music industry, and their strategy to a really powerful player is to make them less powerful by diminishing their library. Hulu and Youtube are just entering the arena now, but eventually what they want is for you to be completely unable to get everything you want from a single provider for $8. You'll have to pay $8 to netflix in order to stream Warner Brothers movies, pay $8 to hulu to stream things Stars has the rights to, pay $8 to youtube to stream HBO movies, etc, etc...

          Basically, they want to turn the streaming service into cable.

      • Re:I agree. (Score:4, Insightful)

        by Anonymous Coward on Wednesday October 26, 2011 @10:11AM (#37843632)

        They can also push into the adult movie industry as well. It's absolutely HUGE, and would gain them millions of more subscribers.

        People... pay... for porn?

      • Re:I agree. (Score:5, Insightful)

        by shadowfaxcrx (1736978) on Wednesday October 26, 2011 @10:46AM (#37844096)

        The trouble is that as we know from all the bullshit RIAA lawsuits (going after 75 year olds who don't own computers, etc) the media publishing industry is somewhere in 1975 and would like to keep it that way as long as possible. This is an industry famous for fighting every advance in technology that later ends up making that industry craploads of money. Tapes, VCRs, etc, were all fought tooth and nail. Hell, Sony had to get Mr. Rogers to testify for them in court before the VCR was finally acknowledged as legal.

        With that model, not playing ball with them at this stage means that they will take that ball and go home, and Netflix will be back to streaming the crap content they were putting out when they first put their streaming online.

        They're going to have to walk a fine line for awhile until the entertainment industry gets their head out long enough to realize that streaming content will make them a lot of money.

      • the next worst decision they made was to play ball with the entertainment industry when they demanded more money

        What makes you think they just roll over? They don't. If you notice things expiring from instant it's because contracts are ending and not getting renewed at higher rates. One content owner (Starz, maybe?) asked for a 10x increase and Netflix quickly declined. Netflix is negotiating well and walking a fine line.

    • Netflix was always intended to be a streaming service. The main goal of the company was outlined back in 2001; they had planned to have completely shut down the DVD service (having replaced it with streaming) by 2007 but the US missed their internet data rate predictions by a large margin. The technology simply wasn't there.
      • by hedwards (940851)

        And the move would have made more sense if the streaming selection wasn't so blowful. I might have remained with them had the selection either been better or the price lower. Paying the same $8 for streaming as for DVDs makes no sense when the library is so much larger for DVDs than for streaming. Ultimately, I got pissed off enough that I went with Blockbuster, I'm paying an extra $3 a month over the 2 a plan at Netflix, but I get game rentals and Blurays.

        Worse is that you can't necessarily count on someth

      • by omnichad (1198475)

        How did they expect to negotiate content at the same or relatively similar rates to DVD rental? DVD rental only works because of fair use - not because the movie studios would ever offer anything for commercial gain at that price.

    • by Beyond_GoodandEvil (769135) on Wednesday October 26, 2011 @10:27AM (#37843804) Homepage
      I think Netflix needs some new leadership. Keep the streaming, lose the dumbass moves.
      Wow, some people just don't get it. What does the Netflix streaming service have? A brand name and some servers. That's it. Now what do the movie studios have? Content and branding. So why oh why would the greedy ass studios want to keep Netflix as the middle man in the streaming service game, why the only barrier to entry is the servers to push the data. Unlike Apple who sold the hard ware you consumed Big Media's wares on, Netflix doesn't make players/set top boxes/portable electronic devices. So again why would a Sony Entertainment division want to keep Netflix around as the toll collector on the great movie streaming highway of the future? Where's the value added step?
      • by rnswebx (473058)

        You grossly underestimate the infrastructure requirements to provide a service like netflix across the world. It's far easier, and more profitable, licensing to many companies (netflix, itunes, blockbuster, hulu, amazon, etc.) and sit back collecting royalties while focusing on their primary business, which is creating content.

      • by elrous0 (869638) * on Wednesday October 26, 2011 @10:41AM (#37844004)

        Because with Netflix, I don't need 300 different apps from each studio (each with its own unique passwords, fees, layout, content restrictions, etc.) to contend with on my Xbox. It's all in one convenient, easy-to-use place.

        • by IICV (652597)

          That's you. Warner Brothers doesn't care about you not wanting three hundred different apps, they care about the fact that if they have their own service that streams their movies and shows, they might get you to sign up for it and cut out the Netflix middle-man.

          • by Rich0 (548339) on Wednesday October 26, 2011 @11:28AM (#37844716) Homepage

            And that's why Warner Brothers is going to shoot itself in the foot. Again.

            The studios just don't get it - they think that the huge legal weapons they've managed to lobby for somehow will get people to send them money. However, to get people to spend money you have to sell them a PRODUCT that they're willing to pay for. People would be willing to pay for the movies, but the studios seem determined to make that so painful that people would rather buy it on a DVD or download it online or whatever.

          • by PatHMV (701344) <post@patrickmartin.com> on Wednesday October 26, 2011 @11:31AM (#37844758) Homepage

            Except that Warner Brothers DOES care, because if you have 300 different apps, you're very likely to decide that signing up for WB's service, going through all the hassle of giving your CC info to ONE MORE site, fixing compatibility issues with their ONE MORE player, etc., is just not worth it, when you just want to watch frickin' Batman tonight.

            Remember, movies compete not just with other movies, but with other leisure activities, including TV. "Honey, which app do I go to to watch Batman?" "I don't know, what studio came out with that one, again?" "Heck if I can remember!" "Well, look it up on the IMDB." "I can't the tablets in the other room!" "Well screw it, let's just watch that episode of Criminal Minds that got recorded on the DVR last night."

            • by tbannist (230135)

              Actually that's why Warner Brothers (and other studios) should care. Evidence to show that they either understand that or that they actually care is lacking.

      • by omnichad (1198475)

        For the same reason we can't just buy a generic satellite dish and receiver and subscribe to individual channels direct from the provider. Granted, it would be great if that were to happen, too, but convenience is HUGE. Having one app to see content from any studio is a big win.

      • by bay43270 (267213)

        What does the Netflix streaming service have? A brand name and some servers. That's it.

        Technically, since they use Amazon for servers, all they really have is a brand, but that's a bit beside the point.

        I like to think of Netflix as the HBO of streaming. They simply provide a single interface to get access to a mix of old and new content of varying quality. They will have competitors (maybe Amazon will become the Showtime of streaming), and there's nothing keeping the studios from going direct to the viewers (FX, or DisneyChannel).

        But the studios still need Netflix for revenue the same way D

      • by tlhIngan (30335) <.slashdot. .at. .worf.net.> on Wednesday October 26, 2011 @12:03PM (#37845136)

        So again why would a Sony Entertainment division want to keep Netflix around as the toll collector on the great movie streaming highway of the future? Where's the value added step?

        The value-add is that the more services, the less control each service has. The movie industry, after seeing how iTunes has basically got the music industry by the balls, has decided the best way to prevent that is to ensure that there are several (not many, not one) services, each of which will have to beg and submit to get its content.

        Hence, iTunes, Netflix, Hulu and a few other sites.

        Steve Jobs basically did a coup against the music industry (where in the world would a Mac's (at the time) pathetic 5% marketshare be considered a positive selling point? Yet, the music industry was relieved it was to be Mac-only in the beginning). Of course, the iPod and iTunes Fairplay DRM basically ensured that Apple controlled the music industry. The endgame was Amazon was allowed to sell music DRM-free, and Apple renegotiated.

        The movie industry sees this as a far worse outcome - they would rather have people pirate their movies than be under the thumb of Netflix or iTunes or whoever becomes the dominant player. They want control.

  • I didn't leave (Score:5, Interesting)

    by fortapocalypse (1231686) on Wednesday October 26, 2011 @09:44AM (#37843308)
    While it was a big mistake, and I agree that someone should be fired, I think what they have been offering and would have continued to offer (even if at a higher price) is *much* less of a ripoff than cable and satellite. I've been very pleased with my family quitting cable T.V. and going with OTA T.V. and streaming Netflix and the major T.V. networks recent show via browser. I don't waste time scanning through the cable guide anymore to watch more T.V. than I should have anyway, and we don't have to deal with DVR issues.
    • by cashman73 (855518)
      I didn't leave, either. Though I never subscribed to the disc option -- I'm streaming only. I was going to add the one-disc-at-a-time option for $2, but decided against it after the price increase. They still have lots of good movies out there, and I notice more and more coming every week. Maybe not tons of fresh-out-of-the-theater stuff, but a lot of the cult classics like Strange Brew and Spaceballs are there. Plus, they just added Star Trek: Deep Space Nine this month, so I'll be keeping my subscription
      • by gorzek (647352)

        I've always been streaming-only and have yet to run out of things to watch. Just when I think I'm about to reach the end of my queue, they add more titles and I have a reason to stay for a few more months. If they can keep expanding their library, I will probably stick around for the long haul. I'll even tolerate a price hike. I think $15 is just about my limit, though. If they go above that I will probably drop the streaming service. As it is, Netflix streaming is a much better deal than cable or satellite

    • I'm happy with the streaming service, too. It's way too convenient to complain about for $8/month.

  • by alexander_686 (957440) on Wednesday October 26, 2011 @09:44AM (#37843318)

    Didn’t we have an article here yesterday on disruptive innovation? To ignore quarterly profits and ignore your current customer base and boldly strike out with the best products?

    I am mention this not because I liked the Quikster idea – I hated it. But to point out that being innovative is hard. Any big radical plan will stir up the pot.

    As to management – All I can say is that they had the good sense to boldly put forward a plan – and then quickly kill it.

    • If you have a big radical plan, though, you have to be able to back it up with more than just hopes an dreams. Jobs was able to do this at Apple because he had a concrete vision of what the end product would be and a deep understanding of the technology. Netflix didn't!! There was no thought out plan, no preparation, no understanding that they would have to take a hit for this to work.

      The idea of breaking off streaming is a good one. The problem was in the execution. They needed to have deals in place

      • My family watches almost nothing but TV on Netflix streaming and we're fine with that. Several other slashdotters have pointed out all they great things they find on Netflix streaming. I think $8 a month for what you get is a great deal. I can Redbox the rare new release I just have to see now.

        Instead of lots of anecdotes either way, is there any data to prove that Netflix streaming needs new releases to be a viable business?
      • I'm not sure why Netflix management couldn't understand that the signing of major studio deals for streaming woud be a pre-requisite before implementing this strategy.

        I wonder if by showing they had less possible subscribers to the streaming service, they could push for lower licensing costs in upcoming negotiations?

    • by craklyn (1533019)

      The innovation is fine. The problem is that Netflix' leadership has been unable to communicate with its customers in an intelligent way. They need to tuck us into bed, and tell a bed time story which ends "and then you bought our new product and lived happily ever after." This is what Apple does when they innovate.

      Instead, you can look at the Quickster announcement. [netflix.com] First paragraph: "I messed up. I owe everyone an explanation." Second paragraph: Talks about how they treated their customers like idiots

      • by omnichad (1198475)

        They thought they were following an apology with a great announcement that would make up for it. But it was a stupid idea, and they only found out how much they hadn't thought it out after they announced it.

  • On purpose? (Score:4, Interesting)

    by koan (80826) on Wednesday October 26, 2011 @09:45AM (#37843328)

    Almost seems like some one purposely destroying a company, though for what reason I couldn't say.
    Just epic incompetence?

    • Almost seems like some one purposely destroying a company, though for what reason I couldn't say. Just epic incompetence?

      see Nokia

    • by eulernet (1132389)

      Just epic incompetence?

      No, corporate blindness.
      If the top management doesn't listen to all the hierarchy, this is the kind of problem that appears.
      BTW, this is a good lesson, as long as it is learned !

  • The chaos made me think about the service, and how little value I was getting from it. I would go months without using it, and then maybe watch a couple old Doctor Who eps.

    The thing is, a few months ago, Amazon Prime (which I already had) put out the same Doctor Who eps on their service, also free.

    So why was I paying for it? It was cheap and convenient...

    So they raised the price AND took away options. Of course I cancelled. Had they stayed quiet, I'd probably still be shelling out $8/month for nothing.

  • by Anonymous Coward on Wednesday October 26, 2011 @09:54AM (#37843420)

    I would join Netflix, but they don't say how much it will cost! Yes, they say the price of "streaming" and the price of "1 DVD at a time". But where are all the other prices? Like for 2 or 3 or 4 DVDs at a time? They don't post those anywhere on their site. Why are they so secretive? I'm not going to sign up unless they say ALL of the prices up front! Would it really kill them to have a link to a "price list"???

    • Re: (Score:2, Informative)

      by Anonymous Coward

      I'm pretty sure the idea is that you sign up for the *FREE TRIAL*, knowing the small amount of money you'll need to pay each month. Then if you do want a bigger DVD plan (which I wouldn't be surprised to find out aren't nearly as popular), you can change to it.

      As of right now, when I log in, my plan options are:
      Unlimited Streaming - $7.99
      Unlimited 1 DVD at a time - $7.99
      Unlimited 2 DVDs at a time - $11.99
      Unlimited 1 DVD at a time + Streaming - $15.98
      Unlimited 2 DVDs at a time + Streaming - $19.98
      Unlimited

  • by way2trivial (601132) on Wednesday October 26, 2011 @09:54AM (#37843430) Homepage Journal

    the LA times says http://latimesblogs.latimes.com/money_co/2011/10/consumer-confidential-netflix-shares-plunge-subscribers-food-prices-grocery-bill-meat-grain-halloween-masks-recall-target-fro.html [latimes.com] they lost 800,000 ending with 23.8 MILLION subscribers.
    so they went from 24.2 to 23.2 million subscribers... and the rate change -huffington post http://www.huffingtonpost.com/2011/07/12/netflix-price-subscription-plan_n_895779.html [huffingtonpost.com] was from 9.99 to 15.98?

    so before, they had 24.2 million at ten bucks a month, now they have 23.2 million at 15.98?

    • You're missing the fact that many consumers (including everyone I know using Netflix) dropped the DVD service once it became a completely separate plan. So no, Netflix is not getting $15.98 from a large portion of their customer base.
      • Exactly what I've been telling everybody I know who's talked about this with me. The folks they lost are customers completely gone, but there seem to be A LOT of people who have effectively downgraded, myself included. And they're not sharing those numbers. So not only did you lose customers and have your revenue go to zero, another portion (how big is anybody's guess) are paying less on both accounts (my father in law never used streaming so now he's actually saving a couple bucks a month).

        The funny th

      • Or the other way around. I dropped the streaming service that I hardly ever used and was showing no signs of ever having any Linux compatibility outside of Google's linux.

    • by BusterB (10791)
      Likely a lot of subscribers downgraded their combined plan and chose streaming or discs only. Say, roughly half of the remaining 23.2 million became 7.99 streaming or disc-only subscribers, that's a ~10% loss in revenue by itself.
      • I get that perhaps a lot of people dropped half the service for a 20% (10/8) price cut.

        so if a combo at 10$, they had to both stream to me, and mail me discs.

        so if they lost 20% of revenue, but ended up only providing half the service?
        Damn... I'd still think they'd be net ahead after factoring in cost savings.
        either postage savings or bandwidth/hardware requirements.....

    • by alen (225700)

      in a few months netflix went from being very profitable, growing earnings and literally printing money to losing money

      but i guess on slashdot it's now an excuse to buy the stock

      • by hawguy (1600213)

        in a few months netflix went from being very profitable, growing earnings and literally printing money to losing money

        but i guess on slashdot it's now an excuse to buy the stock

        In a few months, Netflix increased their profit and revenue over last year:

        Netflix Inc. (NASDAQ:NFLX) reported third quarter 2011 diluted earnings of $1.16 per share, surpassing the Zacks Consensus Estimate of 96 cents per share and increasing 65.7% from the prior-year quarter. Earnings surpassed management’s guidance range of 72 cents to $1.07.

        Total revenue of $821.8 million not only increased 48.6% from the year-ago quarter, but also beat the Zacks Consensus Estimate of $813.0 million. The total revenue was in the higher end of management’s guidance range of $799.5 million to $828.5 million.

    • Because they're still losing subscribers, and even within their remaining subscribers there are many shifting to cheaper plans, so you can't count 100% of those remaining as doing so at the higher combined rate.

      Most importantly plans for corporate development are usually made with projections of previous patterns of growth in mind. When the trend goes from positive to 'the most negative ever experienced' it might exceed the tolerance of contingency plans with regard to cashflow. Businesses don't necessary
    • Markets look forward. Netflix was gaining customers and are now losing customers. The new trend is down.

      I'd also be curious to see the average monthly revenue per customer pre/post pricing change. It seems that many moved to the cheaper streaming only plan when the change was announced. This means Netflix lost customers and are making less on each customer they have left. Not a good thing.

  • I still really like the service, and the last thing I want to do is go back to blockbuster.

    Please Netflix, for the love of god, don't fix what isn't broken and don't drive yourselves out of business.

  • In a world so very different from today there was this thing called broadcasting. Access to the content was free, as in turn on TV and watch. These "TV stations" used advertising revenue to build multi-million dollar businesses. In todays world a companies claim they can not stay in the black if they do not charge customers for access to the content AND make money on advertising revenue. It really makes one wonder how those old school broadcasting companies managed to stay afloat.

    • by jackbird (721605)

      Well, there were like three of them instead of hundreds (not counting local UHF stations that broadcasted bottom-dollar content for bottom-dollar ad revenue and tax- and pledge-supported public television). The production budgets for network-leading shows were also significantly lower (although contemporary "reality television" is outrageously cheap to make).

      • by sgt scrub (869860)

        I'd be willing to bet that the total cost of making a seasons worth of "reality tv" is cheaper than the original cost of making an episode of I Love Lucy. Still. It isn't just that yesteryear TV shows were expensive to make. Factor in the cost of running the entire broadcasting station into the cost of making and developing new shows. Your looking at millions of dollars in expenses per year. Either advertising costs have dropped to the floor or the owner's paycheck is a little steep.

    • It really makes one wonder how those old school broadcasting companies managed to stay afloat.

      From a tech perspective, the obvious thing that leaps out at me is that the broadcast companies had vastly superior delivery tech: radio broadcast. That means they really just had one party (not counting competitors) standing in their way (FCC) and once they got through that, nearly every potential viewer was guaranteed delivery of the ads.

      Analogously, Netflix is using pre-radio tech such as letter-writing. Every

  • But discs are dead! I see it proclaimed on every geek site!

    What? Only 3% of my queue is available on streaming? Oh. Guess I'll stick with discs for a while.

  • by MachineShedFred (621896) on Wednesday October 26, 2011 @10:13AM (#37843672) Journal

    If you screw your customers over to get an extra buck out of a service that they most certainly can live without, they will.

    If you offer a service they want, for a reasonable price, they will use that service. See: the first couple years of your streaming service, and it's massive growth.

    This isn't exactly nuclear physics.

  • by CHK6 (583097) on Wednesday October 26, 2011 @10:15AM (#37843694)
    If Reed Hastings co-founded Netflix because he didn't like late fees, then a 60% increase in service fees would have irked him then too. The CEO just cut ties with reality making these decisions. There is a flip side to capitalism, if your greed is more than demand you fail. This is a win for consumer capitalism and another example of an out of touch CEO. A big thumbs up for Reed Hastings's ability to screw himself.
    • by stewbee (1019450)
      I think that it is naive at best to consider Reed Hastings for doing this for 'greed' alone. Now that Netflix had established themselves as a leader in online video distribution and more than just a niche geek thing, he knew he wasn't going to get the cheap deals again from the studios like he might have before. Again, take for example the Dreamworks deal that happened recently. People are complaining about Netflix having good current streaming content (myself included), so they did what they thought would
    • Not sure how you figure a 60% increase. By my math 9 bucks for both services before changing to 16 bucks now is over a 77% increase.
  • obvious fix (Score:5, Funny)

    by frovingslosh (582462) on Wednesday October 26, 2011 @10:18AM (#37843714)
    They should raise prices to make up for the lost customers.
  • by Anonymous Coward on Wednesday October 26, 2011 @10:18AM (#37843716)

    1) Netflix does not own any content.

    2) Netflix is one contract away from some other company ( I'd bet on Apple )
            delivering content in a way that most consumers are more willing to spend
            their money to access. You don't spit in the face of your customers in a public
            way and get loyalty afterward, not when the jungle drums have been replaced
            by the web and internet forums.

    Netflix is toast.

    Don't believe me ? Just wait and see.

    • by Machtyn (759119)
      Gah! If Apple were to become the dominant player, I'd wretch. As it is, I don't think Apple will jump into the movie streaming business. At least not yet. Amazon is, however, making great strides. They have both a dedicated player (Kindle Fire, et al) and the "cloud" to handle the streaming content. What Amazon and most of the other providers lack is the amount of content, which Netflix still has the advantage.
  • Respect (Score:4, Interesting)

    by FunkyELF (609131) on Wednesday October 26, 2011 @10:20AM (#37843746)

    I respect the fact that they go back on ideas that are bad.

    I remember when they were going to take away the ability to manage multiple queues. I used that all the time when I had room mates, and then with my fiancé back when I was getting 3 at a time. They got a lot of feedback and kept the multiple queues.

    I am probably going to discontinue my service anyway because of the lack of a Linux desktop client. It has been way too long. I shouldn't have to pay Microsoft or Apple just to watch Netflix.

    • by gosand (234100)

      I respect the fact that they go back on ideas that are bad.

      I remember when they were going to take away the ability to manage multiple queues. I used that all the time when I had room mates, and then with my fiancé back when I was getting 3 at a time. They got a lot of feedback and kept the multiple queues.

      I am probably going to discontinue my service anyway because of the lack of a Linux desktop client. It has been way too long. I shouldn't have to pay Microsoft or Apple just to watch Netflix.

      I agree with your points. How many companies would say "well, you guys spoke up and we hear you."?
      I thought the move was dumb, but I also thought that there had to be some reason behind it. Execs and higher-ups in a company actually have a hard job. They have to figure out how to CONTINUE to make a company successful. Quick math on internet forums don't show the whole picture of a company. Netflix was a great value, and as their streaming content grew it was super-fantastic. But I can see how there ar

  • Crappy Redesign (Score:5, Informative)

    by Anonymous Coward on Wednesday October 26, 2011 @10:29AM (#37843832)

    No one seems to remember that the user backlash really started with the horrible watch instantly page redesign (replace text with large movie posters, require mouse-over to see what anything is, slow autoscroll on mouseover rather than a push-button advancement, can't read the posters while autoscolling, no more sortable view, etc) and arrogant corporate response. Look back at the blog - there were 5000 extremely negative responses before comments got turned off and the only response was something to the effect that the new page design was really better and the customers didn't know what was good for them. For me, that was the first indication that the people in charge at Netflix 1. didn't know what they were doing (at least when it came to GUI usability) and 2. had a completely tin ear for customer complaints & service. It really primed the pump for subsequent rage following future bone-headed moves.

    • by roc97007 (608802)

      An announcement that "the customers don't know what's good for them" is a clear sign to sell your stock in the company.

  • How's that arrogance of entitlement working out for your netflix? Was the level of customer loss worth almost doubling your prices while showing public disdain for your customers? You've traded some profitability and a high stock price for no profit and a shattered stock price.

    Entitlement bad for business, bad for customers and bad for profits.

  • Expands overseas! Raises revenue per subscriber!

    For unknown reasons, stock tanks!

    • by superwiz (655733)
      4%, but the point still stands. Don't you know that everyone is to "savvy" to fall for pump-n-dump now. To make money, the shills are forced to nag-n-bag.
  • by Guppy (12314) on Wednesday October 26, 2011 @10:47AM (#37844110)

    I think Netflix completely ignored the value of DVDs-by-mail in serving as a strategic defense against the media companies. If the media companies decide not to license content for streaming, Netflix is screwed.

    On the other hand, should companies refuse to sell DVDs to them, Netflix could purchase them through alternate channels. Redbox rentals was in a similar situation where studios refused to sell to them (correctly identifying them as a threat to DVD sales) -- they circumvented the studio embargo by getting their DVDs from Walmart instead. It's not an ideal situation (Using Walmart was logistically cumbersome, and required waiting until the retail release date), but it allowed them to continue deliver service regardless of what studios said.

  • by slyrat (1143997) on Wednesday October 26, 2011 @11:02AM (#37844338)
    It didn't help that the name was impossible to spell correctly: Qwikster? Quikster? Quickster? Qwickster? Even with it spelled correctly in the summary / title people still have spelled wrong in a couple of comments here. This along with the idea of making it more difficult for the customers make it a fairly big gaffe. Glad things are back to normal. Though I really was hoping the video game disc part would have been kept. Hopefully that can come back at some point.
  • by darth dickinson (169021) on Wednesday October 26, 2011 @11:02AM (#37844344) Homepage

    Funny this comes out today, just yesterday I sent an email to their "general jobs" mailbox applying for the position of CEO [hyperpowered.com]. Doubtful I'll even get a response, but it was an interesting way to kill 15 minutes.

  • Netflix weak streaming content is the source of all their problems.

    If there was some critical mass of streaming content that overlapped with DVD, (ie, all new releases, 75% of DVDs and growing) then I don't think Netflix would have had any problems with most of what they did.

    The price hike would have had the effect of moving all the DVD users to streaming and would have pushed most of them to stop DVD service; users with DVDs who couldn't or didn't want streaming (rural areas, poor internet service, etc) wo

  • But it was really about the price increase, I think. Netflix is not yet the killer streaming app they think they are. They are merely a good first try. It was way too early to jack up prices.

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