Column: Netflix’s new Qwikster service shuns original customers

By Adam Arinder

First off, I owe everyone an apology.

To my loyal readers, my family, my friends — I’m sorry.

I’m sorry for suggesting, endorsing and badgering every single one of you to get a Netflix account.

I just didn’t see it coming. I don’t think anyone did.

However, I will never be able to apologize as much as Netflix CEO Reed Hastings on the company’s newest bonehead move.

“I messed up. I owe everyone an explanation,” Hastings admitted Sunday on the company’s official blog. “I want to acknowledge and thank our many members that stuck with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.”

Well, an apology won’t cut it this time.

For a little back story, two months ago Netflix announced significant changes to the pricing and structure of the company. Instead of charging customers $10 per month for one DVD by mail and unlimited online streaming, Netflix split the services into two groups, charging $8 for each.

For customers wanting to keep both plans, they would be charged $16 per month, or a 60 percent increase. I wrote a column after it all happened, so I won’t rehash it anymore. I’ll just say the public response — including my own — was harsh.

I cancelled my DVD service and stuck solely to streaming — exactly what Netflix wanted.

Streaming is how Netflix makes money, not DVDs, and the company’s latest move proves it.

Later this month, Netflix’s DVD-by-mail service will relaunch as Qwikster.

Hastings explained in his blog post that because streaming and mail-order DVDs are becoming two different businesses, the company needs to let each grow and operate independently.

If you want to continue getting DVDs in the mail as well as online streaming, you must register on two different websites.

Need to change your e-mail address or credit-card information? You get to do it on two different websites.

Instead of making things simpler for its customers, Netflix is basically shooing away its original DVD demographic for this new, hip streaming crowd of customers. Hastings named 12-year Netflix veteran and current head of DVD operations Andy Rendich as Qwikster CEO.

I feel kind of bad for this guy.

Imagine you’re on a luxury cruise liner sailing across the ocean, then all of a sudden being kicked off and told to captain a smaller boat that’s essentially heading over a waterfall.

Not the position I’d like to see myself in.

I’m no business major (only a minor), but I’m pretty sure separating your company while destroying any type of brand recognition and customer loyalty isn’t a good way to run a business.

But again, what do I know?

On a possibly positive side for the new Netflix subsidiary, Qwikster will also start allowing video game rentals — Xbox 360, PlayStation 3 and Wii — along with DVDs for an additional monthly fee.

This will play direct competition to similar service Gamefly, an outlet that allows customers to rent video games by mail.

Hastings promises customers will see a “substantial” addition to the Netflix streaming library, so we’ll see if he delivers on his promise.

This is a bold, yet somewhat confusing, move that Netflix is pulling here. If the promise of an increase to the streaming library is true, I can see a lot of happy customers. However, if the company continues to lose rights to movies and shows from studios — as it has been in the past — then the Netflix cruise liner may be headed over the same waterfall shortly after Qwikster hits the bottom.

So, again, to everyone I know — I’m sorry for getting everyone involved in this huge Netflix mess.

Whenever a better alternative comes around — which will happen — I’ll be the first to let you know.

Read more here: http://www.lsureveille.com/opinion/press-x-to-not-die-netflix-s-new-qwikster-service-shuns-original-customers-1.2633045
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