Netflix Restructuring – separating DVD from Streaming

I was shocked this morning when I opened my e-mail to see this e-mail from Reed Hastings, co-founder of Netflix.  In the e-mail, Reed addressed the issues many have been feeling about the recent price increases of the Netflix subscriptions and a more definitive separation between their streaming and dvd content service.  Now, meaning to assuage the anger of thousands of Netflix users, Reed miscalculated and disrupted a great brand with a new announcement:

Netflix streaming will now be Netflix.com, and the DVD queue option will now be known as Qwikster.com

The e-mail in question

I was shocked, my mouth gaping with disillusioned wonder.  Now, not only was I still being charged the same, but the company I was used to subscribing with was essentially splitting into two entities!  No longer one combined service on one site.  TWO services, TWO sites.

And this was paraded out to me as an improvement, like a salesman parading out a burro and calling it a stallion.

Something now still festers in me, devastated with something that feels so petty: anger at a company splitting its services.  Yes, it feels childish to be so upset, but part of me is rightfully angered by this.

Netflix’s streaming service is not prepared to go it alone from Qwikster.

They don’t have the library of titles to warrant it, and they certainly don’t have the service yet.

I can understand a corporate restructuring to get both sides a better team to work with, but what Netflix and Qwikster have done is essentially taken what was so great about Netflix – the ability to manage both DVD and streaming from one location – and thrown it out the window in favor of a complete restart.

No longer is my Hulu argument valid.  I got rid of my Hulu plus membership earlier this summer, citing the ability to stream content and rent DVDs from ONE SITE: Netflix.  Now, that no longer applies, and Hulu Plus content is the same price as instant streaming and has CURRENT TV SHOWS and MOVIES.  Hulu Plus also doesn’t have to rely on STARZ play for a big chunk of its streaming content, like Netflix does.

Netflix has taken what was unique and simple about its service and destroyed it, under the facade of an easier corporate structure.

This was a poor calculation and a major misstep for a company that could do no wrong meer months before.  In an economy like this, it is not smart to give consumers further reason to drop your services.  But that is exactly what Netflix/Qwikster has done.  Please leave your comments below, and let me know what you think of this debacle.

Also, here’s their video – rife with poor PR management. :/

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