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YOUR FRIENDS' ACTIVITY

    Netflix creates Qwikster, their new DVD-only brand. Does this make the price hike better?

    Photo from Facebook.com/NetflixPhoto from Facebook.com/NetflixIn a massive mea culpa sent by email on Monday, Netflix CEO and co-founder Reed Hastings apologized to angry customers and tried to explain the reasons behind the DVD-by-mail company's unpopular price hike in July.

    "I messed up," wrote Hastings in the email, which was also posted on the Netflix blog late Sunday night. "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."

    He went on to explain Netflix's latest business decision: to completely separate its DVD-by-mail service from its streaming video service. Starting soon, DVDs will be offered only through "Qwikster," which will have its own website, movie catalog, and accounts; customers who currently subscribe to both services will have to log into two different accounts and will see two entries on their credit card bills. (Another price hike is not on the horizon. "The total will be the same as your current charges," he wrote.)

    "We realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently," wrote Hastings. "DVD members will go to qwikster.com to access their DVD queues and choose movies" and, after the site officially launches in a few weeks, video games for Wii, PS3, and Xbox 360 as well.

    But the move-and the apology-just seems to have made a bad PR situation worse. Shares of Netflix stock plunged to $151.54 by noon Monday (down from a high of $298.73 in July), and of the 14,000 (and rising) comments on their apology post, almost none of them were positive.

    "I just got your email, and, as a long-time customer, quite frankly found it to be offensive," wrote David Isaacson of Chicago in a comment. "Your best customers are those like myself that use the DVD AND the streaming services. But those are the very customers that you are alienating."

    Daniel Kirksey pointed out: "Blockbuster by mail already HAS video games. And they have the added benefit of having a handful of physical stores left. If I have to manage two queues and two memberships, you've instantly ceded ground to your only competitor."

    "I am not willing to have to search two separate websites to see if content is available to me," wrote Beth Tucker Long, Editor-in-Chief at Blue Parabola. "I'm not willing to to pay extra to lose my one-stop-shop for everything related to movies and TV."

    "Nice. Dilute the Brand and remove the convenience after already alienating your customer base by a rate increases. Solid choice there," quipped another commenter, Elmo Martin.

    Did you keep your Netflix subscription after the price hike in July? How do you feel about having to log in to two separate sites to access movies and streaming video?




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    25 comments

    • Niko-chan  •  8 months ago
      Honestly, it's still a bad move to separate both services. When you think about it, not everyone would have internet access to stream movies and shows..even in certain cases of blackouts and/or connection lag. And most of the times the DVDs you rent would be scratched up and wouldn't play well.

      So you have both sides for customers to choose from instead of getting both for the small price. For this matter, Netflix will certainly see a massive drop of subscribers soon. I thought about signing up, but after reading about the price hike....nope. So customer lost on that note.

      Redbox and Blockbuster are the only ones with reasonable prices. Yet.......most of the time I wait till the movie goes down in price. Half the time I look up the redbox password for a free movie. Most of the time, I got to my campus media library to rent both movies and video games for free. Money saved!
    • MissLB  •  8 months ago
      bad form....a too late and not enough apology. too bad, NetFlix was so cool before.
    • Lisa  •  8 months ago
      My husband and I had both services, we have since cancelled our DVD subscription because of the pay hike. If I had my way we would cancel our service all together.
    • Tyche  •  8 months ago
      I dropped the streaming service and kept the DVDs by mail part. Why? Because what I really want to see are all the fun obscure old and foreign films that I would otherwise have to purchase to watch. I don't really care about new releases since so few films are worth the time anymore. What will kill me is if the postal service really does end Saturday delivery - there goes my two disks a week at the once disk at a time price! In addition, I don't have broadband internet at home anyway so the streaming has always been useless to me. I know some folks cannot even get that kind of internet service at their homes and never will because it is not cost effective for companies to run the cables out to rural areas. You can also bet there are no Redboxes anywhere near these same folks. DVDs by mail is pretty much their only option. Not everyone is going to jump onto the streaming bandwagon.
    • Katie  •  8 months ago
      We cancelled. The only thing the streaming services really offered was good docs. We switched to Blockbuster because you can trade in the store a handful of times a month and not wait on shipping. Plus they do games, which my husband appreciates. Also, with Netflix it took forever to get a new release, with Blockbuster we have it as soon as we want it. If there's something we just can't wait for, we can always go check Red Box.
    • frecklesmcgee  •  8 months ago
      Horrible move. I dropped my membership as soon as it was announced. Whoever they have in their business development department should be fired. This is an excellent opportunity for a new company to come along and offer what Netflix used to sell; I'd be the first one to sign up.
    • ANONYMOUS  •  8 months ago
      NOT a price hike!! Netflix began charging for a service that had been offered for FREE with the DVD optionn.Unlimited DVDs for less than $20.00 monthly is a really good bargain.mucless than cable!
    • deedee  •  8 months ago
      I cancelled it, but then I put it back. I only use the DVD portion, my brother uses streaming and he has an Xbox. So we split the cost so I can use the part I want and he can use his and neither one of us is paying full price. He is considering cancelling the streaming though. He says there is nothing to watch on it.
    • deedee  •  8 months ago
      It is sad that I now need to go halfsies on a Netflix bill!
    • G  •  8 months ago
      I found the email to be incomperhensible:

      "I'm sorry about the way we raised the price. To make it up to you, we're going to reduce the quality of your service...."

      Are they trying to alienate their customers? If so, they're doing a pretty good job!
    • charlee  •  8 months ago
      I have been a customer of Netflix for a long time. I didn't mind the price hike since I don't care about the dvd side and they hadn't increased they price in quite a long time. BUT the streaming side selection is so poor and I hate the new interface I'm now switching to Amazon.com. Better streaming selection and interface at a comparable price.
    • Jasper  •  8 months ago
      Robin-you know Red Box is raising their prices too...
    • Missyro  •  8 months ago
      Yea, I think this was a bad move. There was much convenience in the integration of both services. Without it what separates Netflix or Qwickster(!!?!) from the other services out there? Nothing. They lost their unique selling position. I cancelled my DVD service this morning. The jury is still out on whether or not I'll continue the streaming.
    • cali29  •  8 months ago
      So now along with the extra money i have to pay to get the DVD's i'll also have to log into another site. Way to make thing less Convenient. I think this seals the deal on me droping that service completely.
    • Minty Me  •  8 months ago
      I don't care for the mailed DVD's and I've noticed the streaming choices have now been cut back to a small collection 3rd rate movies. But I think it's asking too much to require customers to open two accounts for two separate entities and have to pay a premium rate for each to do that. Nothing about Netflix says "customer service" and though I used to enjoy it, I won't be sorry to see it's demise, which I think is eminent. Netflix will be as relevant as VHS soon enough.
    • M.J - Fierce Beauty and F ...  •  8 months ago
      I cancelled my membership after the price hike. I had been a customer of Netflix since it first started and found it very unfair to existing customers to have the price was raised like that without adding any new content. And then hearing that they soon won't have Starz movies that made me even more comfortable with my decision. Now people have to log into two separate sites?? That's crazy!
    • Robin J. Sky  •  8 months ago
      We use the streaming often, even though their selection is admittedly dismal. However with a new, separated DVD-by-mail, I'm more seriously considering dropping that portion. We have three or four Redboxes within a mile of us, it's not that hard to run out and grab a movie for the night.
    • Mrs Fliege  •  8 months ago
      We dropped the streaming portion of Netflix since most of the stuff we want to watch is never available. We are fine having discs mailed to us....just like it was when we started with Netflix years ago. Losing the streaming option is no big thing....
    • MLB  •  8 months ago
      I am seriously considering changing services now. I understand that companies have to raise prices occasionally and Netflix was still a reasonable price compared to cable or satellite. This new change has pushed it though. I use my DVD queue to request movies, but also to keep track of movies that I hope may come up on instant queue. I'm thinking of switching to Hulu Plus and Blockbuster.
    • Teregjona Spencer  •  8 months ago
      im really considering canceling too!!! i only kept it because the kids love the instant movies and i like the dvds but its really not worth $16 every month!!! they really need to come up with something quick or they will continue to lose a lot of customers.

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