Netflix is losing in the court of public opinion after announcing plans to rebrand its mail-order DVD service as a separate business, called Qwikster. On Facebook and Netflix’s own blog, the vast majority of comments about the shake-up are negative.
If you missed the news, Qwikster will replace Netflix’s mail-order service and will show up as a separate bill for customers who want both services. The DVD service will no longer have ties to Netflix streaming, so you won’t be able to place a DVD in your Qwikster queue from Netflix, or start watching a streaming Netflix movie from Qwikster. This is Netflix’s attempt to draw a clear line between the two services after raising prices by 60% for people who wanted both.
Netflix users—or at least the ones vocal enough to comment on the Internet—are not pleased, as evidenced by the thousands of angry remarks left on Netflix’s blog and Facebook page. Apparently when you make sweeping changes to a service that people loved, and then try to make up for those changes with even more drastic changes, people get even more upset. Who knew?
Here’s a snapshot of the backlash so far:
“Having one hub to both rate movies or television and compare our DVD queue to our Streaming queue is what truly makes us love you,” Jonathon Matthews wrote on Netflix’s blog. “By splitting each up into their own entities you are severing these lovable features, opening the door to hundreds of competitors, and tearing down the only remaining wall stopping us from switching over to one of them.”
“Other companies make an effort to treat their best customers well, by bundling services and giving discounts,” David Isaacson commented on Netflix’s blog post. “You have chosen the opposite approach, by un-bundling.”
“You’re continuing to make a classic mistake: thinking you’re something different than what everyone believes you are,” Jeremiah Cohick wrote on Netflix’s blog. “You’re not a DVD company and a streaming company: you’re where I go to watch movies. That’s it.”
“I just commented by cancelling,” Amos B. Haven wrote on Netflix’s Facebook page.
I don’t think Netflix is making a bad business move in the long run. As Dan Frommer points out, the DVD business has likely peaked, while the streaming business is growing (and can continue growing outside the United States, while DVDs cannot). Hanging onto both businesses is difficult because they have different cost structures, different audiences and different marketing needs. That’s essentially what CEO Reed Hastings wrote in his blog post.
In other words, Netflix knows that streaming is the future and is willing to sacrifice mail-order DVD customers to get there. But those customers will be damned if they don’t let Netflix hear about it first.