Tuesday, September 20th 2011

Customer Agony over Netflix's Price Rises & New Split Personality

Netflix's CEO, Reed Hastings, has apologized for mishandling a recent price increase that caused customers to fly away in droves. However, that was immediately drowned out by the decision to split the Netflix service into two, one with the odd name of Qwikster. The new streaming service will still be called Netflix and continue to have the same dedicated website as the old physical media one, netflix.com. However, the DVD rental service is now branded Qwikster, which will also have it's own site. Crucially, both sites will operate completely independently, which means separate logins and user profiles for each one, causing significant inconvenience to customers.


To all intents and purposes, Qwikster will operate as a separate entity and even have it's own CEO, while being owned by parent company Netflix. This all appears to be a strategy to wean customers off the old physical media service and onto the new streaming one, although it instead appears to be doing a better job at alienating all its customers, who can find the kind of service they want from places like Amazon and iTunes. Once again, Hastings apologized for the inconvenience and said:
It's hard for me to write this after over 10 years of mailing DVDs with pride, but we think it is necessary and best.
On top of this, the streaming service doesn't have anywhere near the same range of movies as the old DVD one, making customer retention a challenge. Unfortunately for Netflix, all this is taking its toll on the bottom line, with 600K customers fewer at the end of this month than at the end of June, by far the worst downturn the company has ever seen. This has wiped 53% off the company's stock value, which translates to around $8 Billion lost. The fact that Netflix were unable to renew a contract with a major supplier of movies, really isn't helping, either. Hastings has always steadfastly refused to rent video games. However, to help stem the tide, Hastings now wants to start renting these through the Qwikster service.

It remains to be seen how well Netflix does over the next year. However, they are very well established and streaming is the way forward, so I think they'll pull through. They should just remember it's their customers that keeps them in business and treat them well.

A longer version of this story is available over at Yahoo News.Source: Yahoo News
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72 Comments on Customer Agony over Netflix's Price Rises & New Split Personality

#1
xenocide
God this is dumb. Most of this would be prevented if they could work out a more reasonable deal with MovieCable companies, but apparently they still think if people aren't getting Netflix they will actually buy their products for exponentially more money...
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#2
LordJummy
I cancelled my service after I received the email.
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#3
DannibusX
Watching an implosion never gets old.

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#4
JrRacinFan
Served 5k and counting ...
Didn't cancel my service although intended to stream only anyways. This could go either way for the company but I foresee it to be the beginning of the end.
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#5
erocker
I still have my streaming subscription. I think Cold Storm mentioned in another thread that Starz will be leaving Netflix. I'm going to wait and see if any new content is available by the end of the month. If not, bye bye. Also, I don't see any customer agony.. not sure where that comes from. I do see a lot of customers leaving though.
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#6
Cold Storm
Battosai
by: LordJummy
I cancelled my service after I received the email.
I'm doing one more month, to get the ones I have somewhere in my house, and then I'll be doing the same..


600k people leave, your main company, only company behind you in movie steams, leaves... Now you split the company to add games...


If they told me..

"We've made a profit this year, so your now going to get games.. but, there's a catch.. Gotta raise the monthly dues..."

I might of stayed..

Not raising the price after a profited year, just to have everyone of the 600k people that left think... You raised the dues, to allow yourself to have even more money to expand while leaving the ONE THING that your pushing have p1ss poor quality..

Oh, well.. Others will look at my rant differently.. I don't really care..



by: erocker
I still have my streaming subscription. I think Cold Storm mentioned in another thread that Starz will be leaving Netflix. I'm going to wait and see if any new content is available by the end of the month. If not, bye bye.
Here you go Rockz
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#8
BrooksyX
I was planning on adding netflix streaming only as I don't have cable (or over the air tv for that matter) but if starz is leaving them I might just hold off.

I am just amazed at netflix recently, things are just falling apart over there.
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#10
Sir B. Fannybottom
If you're in Canada netflix was shit anyway. They best thing they had on there was hot fuzz, and top gear. I tried it and saw they had about nothing, said "oh, well it's still new in Canada they prob just need to sort out all the legal things I'll come back in a few months" I got it in the summer, still shitty. I'm kinda glad they went out of business. Not so much of the lack of content, but how they blockbustered blockbuster, and anything like it. I have a small town which had like 3 movie rental places, blockbuster came here, it went down to one other place. Then netflix came to Canada and now all we have a blockbuster, which also might be leaving.
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#11
TheLaughingMan
Dear Netflix,

I need a job and I can fix this whole problem for you in 3 weeks. I seem to have one very important skill your CEO does not. COMMON F%&^ING SENSE! Call me.
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#12
Cold Storm
Battosai
I just don't get how raising money for dues and not talking to the people is ok... Yes, he finally came out, and said sorry, and now their going to try and cut the company in half.. Work on streaming, (you need to overhaul that btw), and then give you games for Mail-ins... But, that doesn't make up for what you did..

I know change is needed.. Oh, man I know they need to change.. But, I don't think that separating the company, to allow yourself a "out" for when you feel DVD-Mail-in's go "south"... Is the way they should handle it. Which I don't even think will for quite a few more years at most..

Steaming can't give you the stuff that your dvd/blu-ray can.. Yes, we are at the age where more people are wanting tablet/smartphones to run everything... So, their streaming right now is "all right"... But, like I've said in my posts on GN... I don't use a tablet.. Nothing to use yet for myself or business.. So, till they can fix the steaming to where Laptop's use it just fine... I'm cancelling.
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#13
NC37
We were going to stay on for net streaming but now...once I get back home from trip, gonna cancel. Honestly am not using Netflix much at all anymore, even for streaming. Trouble is, so many of the DVDs I want are either missing or badly damaged. When I started with them, I'd get loads of great movies and all were great quality. But as time went, I commonly had to report broken discs or just bad ones.

Now their instant stream library seems to be fluctuating again. Few movies on instant, aren't anymore. Just a pain in the butt.

Just one bad business move after another this year. To go from a rental giant to now this...Netflix is doomed. Quikster isn't going to save it. Just gonna make things worse and eventually they'll add streaming too to get more customers and return full circle to Netflix. Renting games is a whole world of hurt if you don't have experience in doing it. Gamefly does and I really don't see Quikster becoming a success on this.
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#14
Sir B. Fannybottom
by: Cold Storm


I know change is needed

Steaming can't give you the stuff that your dvd/blu-ray can..
I think they're just a little ahead of them selves... I see the physical media phasing out, but not with in the next 3 or 4 years... Internet needs to get faster, and things like Google TV need to be more common. You can get almost the same experience on the computer streaming as watching on the tv, but If I sit at my computer to watch a movie, I often find my self not paying attention to the movie and get sucked into something else, it also seems a bit lonerish... Nothing compares sitting on a comfy couch, with popcorn, and your girlfriend close to you watching a scarymovie on a 40" TV. Yeah, you could just say "plug in a laptop to the TV" but then you need to get a wireless mouse/keyboard, and the laptop could get hot and the fan kicks up... Netflix was perfect before... Who ever decided it needs to change should get a swift kick in the nuts.

TL;DR: Netflix was fine, streaming isn't the same as DVD/Blueray.
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#15
NC37
Yeah the net needs to get a lot faster. Still got major ISPs selling semi better than 56k DSL. I've used the highest speed DSL I could get and over time the price has come down but the speed hasn't increased. If this is going to be the baseline then just make it the baseline and get rid of the other packages.
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#16
Cold Storm
Battosai
by: NC37
We were going to stay on for net streaming but now...once I get back home from trip, gonna cancel. Honestly am not using Netflix much at all anymore, even for streaming. Trouble is, so many of the DVDs I want are either missing or badly damaged. When I started with them, I'd get loads of great movies and all were great quality. But as time went, I commonly had to report broken discs or just bad ones.

Now their instant stream library seems to be fluctuating again. Few movies on instant, aren't anymore. Just a pain in the butt.

Just one bad business move after another this year. To go from a rental giant to now this...Netflix is doomed. Quikster isn't going to save it. Just gonna make things worse and eventually they'll add streaming too to get more customers and return full circle to Netflix. Renting games is a whole world of hurt if you don't have experience in doing it. Gamefly does and I really don't see Quikster becoming a success on this.
Their going to try and take gamefly.. I loved them when they started, did it for 2y and then stopped.. tried it last year, and I couldn't get why now I can't wait a week for getting a game across the country.. Instead.. I get the factor of... Not in warehouse, and have to wait.. Even though it's somewhere else..

Netflix is known for library fluctuations... Steaming is the same way.. Some times every few months they take the stuff off and you lost what you had in the que...
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#17
AsRock
TPU addict
Thanks Q for posting it :).


Anyways we stopped the DVD and bluray rentals some months ago as this has been said to happen for some time now..

They all so limited how many devices that can be connected to but not heard any thing of that YET.. We noticed a few weeks ago and was limited to 2 streams only not the 3 we commonly use.

Thing is though in the end it's hell load cheaper than having cable TV...
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#18
newtekie1
Semi-Retired Folder
I never really cared about the streaming service. However, when they added it for free it was a nice bonus, however it wasn't free to them. It amazes me how many people totally freaked out when they decided to charge for the service. In fact I seem to remember when they first introduced it(I was a member of netflix long before streaming) they said it was only a test and would only be free while they evaluated the idea.

But anyway, the fact is that they added streaming and didn't raise prices, my price for the 2 DVD package remained the same. In fact, they added a 1 DVD package while I was a member that wasn't an option when I joined, and that was cheaper, and they still gave streaming to those customers for free. They also added a 1 DVD limitted package that was even cheaper still, and still gave streaming.

You've been getting the service for free for years, so STFU about finally having to pay for it. It certainly wasn't free for Netflix to implement it and provide it to you, so you should be grateful it went this long for free, and not bitch when you finally have to pay for it.[/rant]
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#19
15th Warlock
This supposed "apology letter" was more like an announcement letter, very disappointing indeed, this CEO is completely out of touch with his costumers, makes you wonder if he went to the same economy school the current CEO of HP went to, talk about corporative suicide.

His letter was like "I'll make up a nonsense excuse for why we screwed all of you; oh, and by the way, we are making life a little harder for you guys who want to keep both services at the higher price, all without any added value, have a good day"

I've been a client since 2007, decided to continue with the streaming service only starting this month, but after the news that Starz was leaving Netflix broke up, I no longer know if I want to use their service.

Besides, I heard Blockbuster will start their own streaming service at a very competitive price, that's what the market needs now, as Amazon Prime and Hulu+ were never able to reach the same popularity Netflix had.

A few decades from now schools may use Netflix and HP as examples of how to kill a business model in a few easy steps for their economy courses. I would hate to have stock on both companies and see half its value go up in smoke in a few months due to some piss poor judgement from their CEOs.
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#20
suraswami
I didn't mind the price increase when opted for both DVD/BD and Streaming, like few mentioned watching movie using a DVD/BD player connected to a big screen and all the home theater equipment is far better than crappy streaming. If they are phasing out DVD then it is really sad.

I am not sure if streaming does give you the 5.1/7.1 channel audio option.

I will cancel DVD/BD option if they allow me to watch same new releases thru streaming with BD quality and multi-channel audio option.
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#21
Sir B. Fannybottom
Do you think Netflix will have a sort of redbox Esq thing to deal with us complainers?
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#22
15th Warlock
by: suraswami
I didn't mind the price increase when opted for both DVD/BD and Streaming, like few mentioned watching movie using a DVD/BD player connected to a big screen and all the home theater equipment is far better than crappy streaming. If they are phasing out DVD then it is really sad.

I am not sure if streaming does give you the 5.1/7.1 channel audio option.

I will cancel DVD/BD option if they allow me to watch same new releases thru streaming with BD quality and multi-channel audio option.
I can select 5.1 sound from some HD streaming movies on Netflix on my PCs, PS3 and Bluray player, but you can tell they're using a compresed sound source, not even close in quality to what you get from Dolby TrueHD or DTS HD from a BD
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#23
qubit
Overclocked quantum bit
by: AsRock
Thanks Q for posting it :).


Anyways we stopped the DVD and bluray rentals some months ago as this has been said to happen for some time now..

They all so limited how many devices that can be connected to but not heard any thing of that YET.. We noticed a few weeks ago and was limited to 2 streams only not the 3 we commonly use.

Thing is though in the end it's hell load cheaper than having cable TV...
And yes, who's fault was it I posted this article? :D :toast:

I can see why you stopped subscribing. It's very irritating when a company artificially and arbitrarily limits things in this way, isn't it?
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#24
Cold Storm
Battosai
Oh newtekie... I love the rant. :D

I don't care for the price of streaming.. they needed it.. I care for how they are doing it.. the steam is fine by me to pay for.. But, Profit year, and raise price.. Profit year, raise more price.. They could of done it a lot better if they were up front with everything.. Not, beat around the bush, and still.. don't have a smarter reason for it..
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#25
suraswami
by: 15th Warlock
I can select 5.1 sound from some HD streaming movies on Netflix on my PCs, PS3 and Bluray player, but you can tell they're using a compresed sound source, not even close in quality to what you get from Dolby TrueHD or DTS HD from a BD
I never see the 5.1 lit up on my receiver even when watching HD movies using my PC (thru Windows media center or thru IE), I watched 'Blitz' yesterday, it said its streaming HD.

How did u get it to work?
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