Email from Netflix @CEOReedHastings …. Is this a joke?

by Ryan on September 20, 2011

After reading the recent email (pasted below) from Netflix CEO Reed Hastings regarding the Qwikster / Netflix / Price Increase / Reneg fiasco, I have a number of questions / comments…

1.  How much am I paying per month?  The same?  Is it the old pricing before the price hike or the new pricing after?  Just tell me a friggin number!

2.  Why did you choose such a stupid name like qwikster?  Spend $100k on DVDsbymail.com or something.  Qwikster sounds like a cheap $9 domain a broke entrepreneur would call his startup.

3.  Which site has my credit card info?  Netflix? Qwikster?  Both?  How do I just keep things the same?  How do I cancel one and not the other?

4.  Is my login info the same for each site?

5.  When exactly will Qwikster launch?

6.  How in the heck can you not integrate the two websites?

7.  Is qwikster it’s own entity?

8.  Where is the unsubscribe link?  I know you think this is an important communication but after what you wrote (assuming you actually drafted this yourself), I’m not sure I ever want to hear from you again.

9.  Why such a long, rambling email?  Did your PR department approve this?  Did you really write this yourself?  Could you have not used bullet points and prepared a detailed FAQ page?

The list of questions goes on and on.  Not to mention some of sentences in your email below I have read 3 times and they still make no sense to me.

I honestly don’t think this could have possibly been handled worse.  From now on when entrepreneurs have poor customer relations incidents, it should be called “pulling a Hastings” or “getting Reeded”.

What do you think?  How could he have handled this better?   Please leave your opinions in the comments below.

UPDATE: On Oct 7th, Netflix announced they were killing off the entire Flixter idea (Netflix would continue to service both DVD and steaming clients with one website, one login, etc.) and keeping the July price hikes in place.   What a rollercoaster!

From: “Reed Hastings, Co-Founder and CEO of Netflix” <info@netflix.com>
Date: September 19, 2011 1:47:48 AM PDT
Subject: An Explanation and Some Reflections

Dear Ryan,
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.

This message was mailed to you by Netflix.
SRC: 1578.0.US.en-US
Use of the Netflix service and website constitutes acceptance of our Terms of Use and Privacy Policy.
(c) 2011 Netflix, Inc. 100 Winchester Circle, Los Gatos, CA 95032, U.S.A.

Posted via email from Ryan Born

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  • David Savage

    Mr. Hastings. I have a concern about your going into China, Japan, etc. My concern is that almost all of the movies today are trash, sex, violance, language, etc. The rating system is a joke. Is that what we want to transport in order to grow and make money?

    Former Maine State Rep.
    Dave Savage @Savagedata1@earthlink.net.

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