Mr. [Reed] Hastings said he realized that the company\u2019s attempt to both raise prices and separate into two companies, one the legacy DVD-by-mail business and the other the up-and-coming broadband streaming business, was trying to do too much too fast. Angry subscribers abandoned the company in droves (800,000 in the fourth quarter of 2011 alone), revenue missed estimates and the stock plunged.<\/p>\n
\u201cI messed up,\u201d\u009d Mr. Hastings wrote in an unusually forthright September 2011 blog post. Citing the precedents of AOL and Borders Books, which struggled or failed to make the digital transition, \u201cmy greatest fear at Netflix has been that we wouldn\u2019t make the leap from success in DVDs to success in streaming.\u201d\u009d But in the rush to accelerate the transition, he wrote, \u201cIn hindsight, I slid into arrogance based upon past success.\u201d\u009d He also made a video apology.<\/p>\n
Mr. Hastings said he didn\u2019t expect the apology alone to \u201cturn it around,\u201d\u009d adding, \u201cI wasn\u2019t na\u00c3\u00afve enough to think most customers care if the C.E.O. apologizes, but I thought it was honest and appropriate.\u201d\u009d<\/p>\n