Netflix / 2 = Netflix + Qwikster
Very interesting development at Netflix: CEO Reed Hastings just announced Netflix is separating into two businesses – Netflix will henceforth contain just the streaming video service, and the DVD-by-mail business will take on the new name “Qwikster.”
Also interesting is the general apologetic tone of Hastings’ blog post, starting with the decidedly un-CEO-like words “I messed up. I owe everyone an explanation,” and explaining the sour reaction to the fare hikes as miscommunication about where Netflix is fast heading in the future.
My cynical reaction: gee, a 50% stock fall has a way of instilling some humility in the best execs.
But no, there are two smart moves here: 1) get customers used to streaming and DVDs as two completely separate businesses with the former being the future and the latter the past – and you shouldn’t expect to get both for the same price anymore, and 2) extending an olive branch to subscribers to repair their previously stellar, now tarnished customer service reputation.
I give Netflix credit for those two moves. But I’m still waiting on the answer to the whole pay-more-for-less situation – meaning what’s going on with the loss of content (Starz, Sony) in the streaming service – I mean, “Netflix.” There better be some big content deals announced in the near future.