When companies I love (as a customer) and admire/enjoy writing about (as a journalist) do something that seems downright crazy to both sides of my brain, like splitting up a well-known brand and its useful and well-loved website, I tend to wonder if I’m missing something.
Netflix’s announcement that it would split into a streaming-only business (called Netflix) and a discs-by-mail business (called Qwikster) caught me by surprise. It’s easy to miss a lot of things when you’re surprised, particularly when the surprise drops after midnight on the east coast, and you stay up all night writing and talking about it.
When this happens, it’s best to look for smart people with different opinions from yours, who’ve probably also had more sleep than you have.
There are so many different ways they could have done the exact same thing without alienating so many customers that it’s too exhausting to even think through the whole list — much write them down.
What it boils down to is this. They started up a streaming business and told their loyal DVD fan base that they could effectively get the same stuff streamed as well for just $1 or so more a month. Except that it wasn’t even remotely the same stuff. Nonetheless it got a lot of people who would never have thought of streaming to try it out and in many cases to make the effort to buy a Roku or do whatever it takes to get Netflix to stream on their TV. OK, so Netflixers are now starting to get used to streaming and generally they like it although its almost useless for movies. But watching old episodes of Columbo on demand on TV is fun. Except they suddenly get told that….ooops!….we’re now going to charge you double for this. [Those first few shots of heroin are free but did we mention it’s $100 a hit afterwords??]
If they absolutely knew they were going to break the business into two they should have done that FIRST and made the cost of the two combined just a bit more than what people were paying for the two bundled before. Then they could have, independently, over the course of a year, raised the price of each one until the total price is where it is now. They still would have taken a major hit for the extreme inconvenience of search/save/history/reviews being in two places and not communicating with one another. [That one is just dumb by the way. ] And maybe they could have asked any random person on the street how likely they were to subscribe to any service whatsoever that called itself “Quickster.” But at least maybe their stock wouldn’t have tanked 50%.
Or “Qwikster” but how is anybody even going to remember how to spell it?