Letter of apology from NETFLIX; QWIKSTER to soon arrive

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I opened one of my e-mails today to find a letter.  A letter from none other than Reed Hastings, the Co-Founder and CEO of Netflix.  A once treasured movie company by myself and many, many others, Netflix is now losing customers due to their insistence of splitting their services and raising of prices.  They have tried to reassure us all that it is completely in our best interests and we will definitely benefit from it but I can’t see where exactly that may really be true.  I’m sure everyone has their own opinion about this development, good and bad, but the fact is that their stock has been dropping for some time now.

Their DVD-by-mail service will now be named QWIKSTER while continuing to maintain the original company name of NETFLIX for their streaming service.  I, personally, have cancelled my DVD service.  I saw it as the sensible thing to do being that I have utilized the streaming service much more than the DVD side of the house.  The letter to us subscribers attempted to explain the reasons why they chose to do what they did.  I’ll be honest, it didn’t explain anything to me.  

I still they wish they left it alone but I cannot control what a multi-million dollar company does.  Apparently not even millions of loyal subscribers (since August 2009 for me) for the last ten years can change that.  I think it was put best when one customer said, “Netflix is doing a great job at encouraging their customers to try the competition”.  I agree but maybe it is for the best.  Perhaps the added work and extra dished out dollar bills will make both services better.  I suppose only time, and the Netflix/Qwikster stock, will tell…

Check out the letter from the CEO and please lend your thoughts and opinions about this entire move.  If you are a customer of Netflix, we especially would love to hear your comments.  What do you think? Are you happy? Pissed off? Do you think any good will come of this?

Dear Sean (that’s me),

I messed up. I owe you an explanation.

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. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So 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.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the and websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

Source: The Netflix Blog

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The Author

Sean Guard

Sean Guard

In high school, Sean wanted to punch the subject of English right in its face. By far his best class, he hated doing research and writing papers. Ten + years later, he is an aspiring writer. It would seem that career goal of leading the New York Knicks to an NBA championship didn’t quite pan out. He started writing film reviews just over a year ago and became a movie buff even further back than that. He’s dabbled in fiction, poetry and random articles filled with nothingness on his way to hopefully one day becoming a published author. Hopes high, right now he’s over there sitting in the corner with his fingers crossed. Visit his blog -