First Rule of Business: Don’t Piss Off Your Customers

I was curious to receive a long, apologetic email early Monday morning from Reed Hastings, co-founder and CEO of Netflix. I thought he was going to spend more kilobytes asking forgiveness for Netflix’s mishandling of changes to its price structure earlier this summer or for tweeting pictures of his privates to a gaggle of teens or for some other moral failing.

In a move that has now been widely publicized and largely ostracized, Hastings announced that Netflix’s DVD-by-mail service is branching off and being rebranded as “Qwikster,” adding services and content such as video games along the way. Netflix will simply be a streaming service.

Details of the split are still emerging, but the biggest pain to current Netflix subscribers seems to be the planned separation of the two services. Essentially, if you’re a Netflix subscriber who currently pays for both streaming content and DVDs in the mail, you’ll need to have completely separate accounts for Netflix and Qwikster. The two services will be billed separately, and it’s looking more likely that your Netflix queue, rather than being an awesome, one-stop integrated playlist/wishlist of cinematic goodness, will essentially be split in two and not talk to each other.

Which is kind of a bummer, since “Netflix” seemed poised to be part of the vernacular kind of like how “Facebook” is now used acceptably a verb.

Yes, these are #firstworldproblems.

And I don’t purport to know how to run a multi-million dollar company.

But first off: Qwikster? Was Qwikflix not available? Because at least with something like Qwikflix, it’s clear what service you’re providing: flicks, quickly. Qwikster sounds like it’s the ugly second cousin of the now-defunct “Friendster.”

Second, I’m wondering why Hastings seems intent on pissing off his customers. I don’t know whether he’s consulting his senior advisors (usually yes people) or his actual consumers (those shelling out big bucks on a luxury service, especially in this economy). But every move he’s made thus far seems only to rile up existing subscribers and make them long for a better alternative.

If I had a gajillion dollars to invest right now, I’d develop a service that would offer what Netflix/Qwikster/WhatevertheHellIt’sCalledNow seems to be running away from.

If there’s something this arena could use, it’s some stiff competition.


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