In a video that is unlikely to wind up in any Netflix user's queue, Netflix CEO Reed Hastings is apologizing to his customers for raising prices recently. He also announced that Netflix is spinning off its DVD-by-mail service and naming it “Qwikster.”
If you're looking for the scene where he rolls your subscription rate back to what it was, however -- well, maybe that wound up on the cutting room floor. From the printed version of Hastings' mea culpa, called "An explanation and some reflections," which went up on the Netflix site last night.
There are no pricing changes (we’re done with that!). Members who subscribe to both services will have two entries on their credit card statements, one for Qwikster and one for Netflix. The total will be the same as the current charges.
Here's the video, featuring a cameo appearance
by some other guy (Okay, he's the new Quikster CEO):
And more from the online announcement:
When Netflix is evolving rapidly, however, I need to be extra-communicative. This is the key thing I got wrong.
In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication. Inside Netflix I say, “Actions speak louder than words,” and we should just keep improving our service.
But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.
Jeez, I dunno. Hastings also wrote, "When Netflix is evolving rapidly...I need to be extra-communicative. This is the key thing I got wrong." I'm not so sure customer dissatisfaction is merely a case of not having provided a PowerPoint presentation along with the bad news.
So far, at least, the price hike has played out like the Heaven's Gate of movie-biz decisions. The Los Gatos-based company's stock price has fallen off a cliff since last week's announcement that it was lowering its subscriber forecast.