Netflix: Self-inFLIXted Wounds

Have you been following the implosion of Netflix lately? I know, it’s not easy! The video rental business built its name on home DVD-rental delivery. More recently, they have also been offering streaming content to their higher-tier customers, basically for free. Well, them days is done, son! And the fans are irate.

Netflix CEO Reed Hastings with self-inflicted wounds. This might be Photoshopped.

The problem is that they tried to build their streaming service by giving it away for free, as an add-on to their snail-mail DVD service. This was a good way to add customers. But the history of the internet indicates that once you convince people something is supposed to be free, or close to it, you will have a devilishly hard time getting them to pay for it.   Megan McArdle, Atlantic Monthly

Particularly when Netflix apparently knew from day one that home-delivered DVD’s were a short-term gateway drug to eventually get us hooked on streaming video. They always knew they would have to start charging for this content eventually, so how did they screw it up so badly? Jacking up the price by 60%, enraging their customers, then splitting the business in two, with Netflix as streaming only and Qwikster for DVD’s. Bottom line, they are expecting to lose 1 million customers in the short term!

So, let’s hear it, Netflix fans. Were you shocked, angry, or indifferent? Let us know!

Update October 10, 2011… Now they have scrapped the whole idea! What a head-scratcher!

11 thoughts on “Netflix: Self-inFLIXted Wounds”

  1. As someone who has been using Netflix for about 3 years, and since moving to an area where I can get high speed internet and using the streaming almost exclusively for the last year and a half, I am not a happy camper. The discs we get by mail are not available for streaming, and since they’ll be splitting the two services into two separate websites, I will have to search my movies and TV shows on two sites, taking twice as long to determine where to queue them. Going to cost a lot of people like me lot of extra time. The price hike… I wouldn’t be so annoyed by that if they hadn’t opted to divide the website/queueing service.

    Perhaps after we finish this series we’re watching I will cancel discs completely and just buy a DVD or two a month used instead. I’m seriously considering it.

  2. Yes, I was angry. I cancelled my service!! I was angry, first of all, that they hiked the priced on DVD rentals, but then to charge (and quite high, I might add) for streaming videos!! And they’re not good videos that are being streamed! I told them! The selection for streaming SUCKS! So I cancelled.

  3. lose only 1 million…….figure it will be more. This will open up great opportunities for other companies that will be able to snatch up the customers leaving Netflix.

  4. I am frustrated about the streaming issue. The change in the mail DVD’s didn’t affect me because I rarely used that feature. If they expect folks to pay for streaming they had better dramatically improve their library.

  5. The new system is terrible we have had netflix for a few years now but we are looking at other companies now. It is to bad they had a good thing but like all good things something has to ruin it.

  6. Not only have they begun to charge for streaming the service has gone down hill as well. Movies constantly interrupted by freeze ups or turned off completely. Once our month is over so is Netfix in our home.

  7. Life is too short to get angry over every change. We didn’t feel it was worth it to continue the DVD portion so we cancelled that. We still have the streaming and watch it every day. I am not missing the movies at all. If there is something I really want to see, I can just go to the store down the street and get it from Redbox. Life is Good:)

  8. I agree with Julie, things will change and sometimes we just need to go with the flow. Netflix handled things badley at first maybe they will redeam themselves.

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