Net and flix

On Monday, I received an email from Reed Hasting co-founder and CEO of Netflix. The email was a mass publication responding to the less than ideal customer reactions to Netflix's new pricing strategy. 

Hasting introduces the email with; "I messed up, and owe you an apology." I have an appreciated for people who can admit to making mistakes. So, I approach Hastings letter with an open mind; curious about his reasoning.

As I read through the letter I could feel my head shake in disagreement. Hasting's decided that streaming video content and renting DVDs are two completely different products and there for should be two different businesses. The decision Hasting decided on: LETS SPIT THE COMPANY! 

DVD renters will continue to rent on line, through a new site, qwickster.com. Streamers will continue to watch on line through Netflix. 

In my analogy, Netflix (online streaming) is the crazy trophy wife who is taking her husband to curb for all he's got. "Quickster,"The original concept of Netflix is the loser husband who has just been played. 

In irony, neither of the services are likely to come out clean. The amount of cash spent, and continuing to be spent/lost in this nasty divorce is astronomical. As a customer, I don't want complications- I want consolidation of services. I want easy one click access to either streaming or renting. I think by separating the services Netflix is loosing focus of their mission statement and organizational objectives. 

On Tuesday, after Reed Hastings announcement, stock fell another 10%. Obviously, I am not alone in frustration towards Netflix. 

The Karma of Netflix

Lazy nights have not been the same since the birth of Netflix. Lazy nights,  once reserved for: ordering take out and browsing the shelves of your local Blockbuster/movie store. It was great; you could compare and contrast covers, find obscure titles, laugh at the straight to DVD releases, and force a compromise with your boy, family, friends on the movies in question. 

The tangibility of holding potentials, and choosing the next 90 minutes, or so, of entertainment was fiercely competitive/enjoyable in its own right. 

Now I'm lost on the online shuffle of "Recommended Features, according to my viewing history." I'm sorry, but I am not a one genera lady, I crave variety.  I miss the isles of the movie stores. I miss my eye catching a fun display, I miss trying earnestly to win the "Black Gumball," and I miss loading up for the evening with shitty candy. 

Netflix; and their immense database of online entertainment ruthlessly climbed the social ladder of customer appeal. In a last unicorn type story: one by one movie rental stores disappeared as Netflix become lord of lazy nights. The Netflix kingdom grew in riches.

 Entitlement to industry leadership became evident in the strategic operations of the company. Since Netflix (NFLX) IPO of $15 per stock in 2002 the value has sky scraped to $304.  In July of this year (2011) Netflix announced an increased subscription price. The rise in price was not accompanied by an explanation or with increased services. 

In reaction; an army of Netflix subscribers became livid. Subscription casualties are now on the rise. 600,000 have already been accounted for September 2011. On Sept 15 NFLX fell from over $211 per share to $155-  Netflix accumulated a loss of 26%  value in just two days.  

With increased competition offering online streaming and more RedBox's popping up round the neighbourhood, I question the future of Netflix.