Tuesday, September 20, 2011

Netflix' Negative History

I’m one of the millions of Netflix users who got this week’s infamous email from CEO Reed Hastings. I’m also one of the hundreds of thousands who cancelled part of their service (in my case, the DVD-by-mail part) because I didn’t think it was worth the extra money -- and because the company didn’t bother to alert me in advance to the increase. I had to read about it elsewhere.

Policy gaffes aside, what’s interesting about Hastings’s communication are his references to Netflix company history (the italics are mine): “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) …. 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.’ …. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.”

Qwikster is starting life with a huge disability. It’ll be interesting to see if Netflix learns anything from its history. In this case, dissatisfied customers are the history teachers.