Someone needs to fire the Marketing Team - Netflix

In my email this morning... Part of me really thinks this is going to be another nail in the Netflix coffin... (emphasis in sections is mine)

Dear Kristin,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing.

For the past five years, my greatest fear at Netflix has been that we wouldn't make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us). So we moved quickly into streaming, but I should have personally given you a full explanation of why we are splitting the services and thereby increasing prices. It wouldn’t have changed the price increase, but it would have been the right thing to do.

So here is what we are doing and why.

Many members love our DVD service, as I do, because nearly every movie ever made is published on DVD. DVD is a great option for those who want the huge and comprehensive selection of movies.

I also love our streaming service because it is integrated into my TV, and I can watch anytime I want. The benefits of our streaming service are really quite different from the benefits of DVD by mail. We need to focus on rapid improvement as streaming technology and the market evolves, without maintaining compatibility with our DVD by mail service.

So we realized that streaming and DVD by mail are really becoming two different businesses, with very different cost structures, that need to be marketed differently, and we need to let each grow and operate independently.

It’s hard to write this after over 10 years of mailing DVDs with pride, but we think it is necessary: In a few weeks, we will rename our DVD by mail service to “Qwikster”. We chose the name Qwikster because it refers to quick delivery. We will keep the name “Netflix” for streaming.

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we’re done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

I want to acknowledge and thank you for sticking with us, and to apologize again to those members, both current and former, who felt we treated them thoughtlessly.

Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.

Respectfully yours,

-Reed Hastings, Co-Founder and CEO, Netflix

p.s. I have a slightly longer explanation along with a video posted on our blog, where you can also post comments.

Seriously? Not integrated? One of the huge positives for me is that I can search for a movie and decide if I want it Now or Later... In fact I was hoping that they could add a feature that when something was removed from streaming it would automatically add to your DVD list. And to roll this out as part of an apology letter? C'mon - that starts the reader in a negative mindset and then you drop more bad news on them?

This should have been a full scale media launch spinning nothing but positives - THEN the pricing structure changes... I wonder if all this is an "OH CRAP WE GOTTA COME UP WITH SOMETHING TO FIX THIS!" idea that they didn't fully think out and didn't fully market research...

I think it's intentional, they're trying to either kill or spin off their mail service.

I think it's intentional, they're trying to either kill or spin off their mail service.

thats my take on it. no reason to have a separate name and not integrate (since it is now) unless they figure on selling it, or dropping it in the future.

of course I'm annoyed, but not surprised. the only reason I even have dvd delivery is to get stuff that isn't available with streaming yet, so as the streaming library gets bigger, there will be less and less need for the dvd's. it just makes sense from a business perspective to move that direction.

It may have something to do with needing to have separate contracts with the studios for streaming vs. DVD, but I agree - splitting them up is not the direction I'd like to see them take.

Oh well, at least the new name will be indicative of their falling stock price.

"Imagine if Netflix and Qwikster combined services... unlimited DVD rentals and streaming. Now THAT would be awesome."

My favorite response to this debacle thus far off my social feed.

"Imagine if Netflix and Qwikster combined services... unlimited DVD rentals and streaming. Now THAT would be awesome.

Doh!

they are doing this so as in the future to be done away with dvd rentals all together which make since when you look at the fact the majority use streaming,mailing cost is increasing and with the news of the postal service down sizing to the point that the postal service has said the avg delivery time will increase by 2 days

And in my mail today:

Dear Kristin,
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.
This means no change: one website, one account, one password…in other words, no Qwikster.

While the July price change was necessary, we are now done with price changes.

We're constantly improving our streaming selection. We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.

We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.

Respectfully,

The Netflix Team

Maybe the mass-exodus clued them in...

I read that this morning, it's pretty crazy. I would think a lot of people at Netflix should be fired over this mistake.

I read that this morning, it's pretty crazy. I would think a lot of people at Netflix should be fired over this mistake.

they have made a few very large blunders in the last few months. some house cleaning is in order for sure.