{"id":2782,"date":"2011-10-24T08:30:53","date_gmt":"2011-10-24T12:30:53","guid":{"rendered":"https:\/\/webhostinggeeks.com\/blog\/?p=2782"},"modified":"2021-10-19T06:48:33","modified_gmt":"2021-10-19T10:48:33","slug":"qwikster-debacle","status":"publish","type":"post","link":"https:\/\/webhostinggeeks.com\/blog\/qwikster-debacle\/","title":{"rendered":"The Qwikster Debacle \u2013 What we can Learn from it"},"content":{"rendered":"

Nothing reminds you so quickly of the fact that even CEOs of major corporations are human than when they royally screw up.\u00a0 When they come right out and admit it in short order, you really wind up dropping a lot of whatever agitation you feel at their six-or-seven-figure salary.\u00a0 Suddenly you just want to forget it all, take them out somewhere and buy them a beer.<\/p>\n

Maybe I’m letting my nice-guy side show a bit here.\u00a0 Some of the angriest Netflix<\/a> refugees would surely say so.\u00a0 That does, though, seem to be about where a lot of the Netflix community is after the cancellation of the fascinatingly wrong-headed disaster known as Qwikster.<\/p>\n

How did such a beloved company fall so far so fast?\u00a0 And what do we have to learn from it?\u00a0 Let’s go to the instant replay.<\/p>\n

The quick and dirty summary \u2013 and it’s both<\/strong><\/p>\n

Following a July 2011 price hike that was huge and poorly received (even as price hikes go), Netflix made the decision to branch off its DVD business from its streaming business.\u00a0 Netflix would still handle all streaming content.\u00a0 The DVD side of their business would be split into a separate company called \u201cQwikster.\u201d\u00a0 A blog post from Reed Hastings, Netflix CEO<\/a>, first apologized for the company’s bad communication, and then gave a brief summary of the coming changes.<\/p>\n

Despite the fact that there seemed a genuinely contrite tone in his post, reaction to the announcement was swift and toxic.\u00a0 One user responded with the comment \u201cI’m afraid your letter will go down as the oddest suicide note in history.\u201d\u00a0 Perhaps having seen it, Hastings, in turn, remarked three days later, \u201cIn Wyoming with 10 investors at a ranch\/retreat. I think I might need a food taster.\u201d<\/p>\n

The bad press and worse customer reaction piled on unmercifully.\u00a0 Whatever reasons that there might have been for the change from an internal perspective, customers could see no immediate way that this benefited them, and a lot of ways that it didn’t.\u00a0 Customers would have to keep two separate accounts with separate information.\u00a0 When you rated movies on one service it wouldn’t show up on the other.\u00a0 This just seemed to make everything more complicated for no good reason.<\/p>\n

This is the end<\/strong><\/p>\n

Finally, not a month after the initial announcement, Netflix issued their surrender.\u00a0 In a contrastingly curt note, Hastings announced that the changes would be scrapped.\u00a0 User reaction to this was split.\u00a0 Some were just so agitated by everything that had happened that they weren’t in the mood to applaud much of anything.\u00a0 Others appreciated that the company was listening to their customers, admitting to an error, and changing course.<\/p>\n

What fallout will come from this whirlwind remains to be seen.\u00a0 One minor unknown is the fate of by-mail video game rentals.\u00a0 This was originally packaged as one of the few new benefits to Qwikster.\u00a0 Whether or not it will still happen is undetermined.<\/p>\n

The bigger question is whether or not Netflix will survive this collapse.\u00a0 Estimates are that the price hike alone lost them 1 million of their 25 million customers.\u00a0 There’s no word yet on how much lower they might go now.\u00a0 Message boards are filled with users declaring their departure, but this is, of course, an unscientific metric.\u00a0 Still, even after the reversal, Netflix’s stock continued to drop.<\/p>\n

Why did they even think it was a good idea?<\/strong><\/p>\n

Using our 20\/20 hindsight, it seems hard to think of any reason in favor of this.\u00a0 Much speculation surrounded the initial decision.\u00a0 Some of the theories included:<\/p>\n