Tuesday, September 20, 2011

KXL: Netflix CEO "Apologizes", Makes Things Worse

Netflix just can't catch a break.

Listen to my radio report on this topic, originally broadcast on Portland's FM News 101 KXL earlier today, 20 September 2011: kxl_techexpert-netflixbacklash_20110920.mp3 (MP3)

In a PR and stock price nightmare, the company announced a price hike moving from basic plans starting at around $10 a month to seperate fees for their signature DVD-by-mail service and their online streaming movies-on-demand offering.

Now customers must choose either the streaming service (with convenient set-top box playback on devices such as Xbox 360, ROKU player, TiVo, and even many newer television sets) or receiving the familiar red envelope with a disc at your doorstep. Each service is now $8 a piece-- a 60% price increase for those without a calculator handy.

Perhaps to make matters worse, Netflix Co-Founder and CEO, Reed Hastings posted and emailed customers (in part) the following statement:
"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. I’ll try to explain how this happened."

Then Hastings continues to explain that the rate hike was necessary to improve the technology of the streaming platform.

What has alarmed users, and as a result shareholders, most, however in the CEO's message seems to be the announcement of a split. Where both products were once offered under the "Netflix" name, now the physical DVDD service will, the note informs, be called Qwikster while the streaming option will retain the Netflix brand.

Now to create queues, search, rank and share titles users will be forced to use two separate platforms-- a confusing option it appears many users are not pay MORE for.

Meanwhile, web comic The Oatmeal weighed in this week with perhaps the genius' most timely and spot-on commentary of the price-hike yet (click the red banner to load the full comic in a new window):

Listen to my radio report on this topic, originally broadcast on Portland's FM News 101 KXL earlier today 20 September 2011: kxl_techexpert-netflixbacklash_20110920.mp3 (MP3)

Is Netflix doomed? Did you unsubscribe? What can save the struggling company from its recent downward spiral? What other streaming movie on-demand options do you recommend?

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