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Netflix Loses 800,000 Subscribers After Qwikster Gaffe
bs0d3 writes "Netflix's video subscription service lost 800,000 customers in the third quarter, the single biggest loss in its history. Shares plunged by more than 25 percent in Monday's extended trading. Netflix is predicting that its combined loss of customers and European launch will push it into the red next year where it may stay for all of 2012, according to a letter to its shareholders (PDF)."
I didn't bitch about the price increase. I understood that one at least. With the big studios demanding more and more money for streaming their content, that was inevitable. And I *love* the streaming BTW. I think streaming was their best move in years. It's especially great for TV shows (which would take forever to watch if you had to get them one disc at a time). Where else can you stream the entire run of Battlestar Galactica (in HD, no less) for $8 a month? Louie, The X-files, Family Guy, Firefly, Lexx, BSG--my queue is filled with many days worth of geek greatness. And some of the content on there isn't available in HD in any other format.
But the Quikster thing really left me scratching my head. Now various theories have been floated as to why they did it. My own personal belief is that they were planning to break Quikster off and then sell it (to focus exclusively on streaming). But whatever the case is was a truly bonehead move from the consumer perspective, especially coming so soon after the price increase. The fact that the CEO responded to the issue of customer anger at the announcement press conference by basically saying "Huh, well, we hadn't thought of that" didn't exactly make it look like a well-thought-out move.
I think Netflix needs some new leadership. Keep the streaming, lose the dumbass moves.
SJW: Someone who has run out of real oppression, and has to fake it.
While it was a big mistake, and I agree that someone should be fired, I think what they have been offering and would have continued to offer (even if at a higher price) is *much* less of a ripoff than cable and satellite. I've been very pleased with my family quitting cable T.V. and going with OTA T.V. and streaming Netflix and the major T.V. networks recent show via browser. I don't waste time scanning through the cable guide anymore to watch more T.V. than I should have anyway, and we don't have to deal with DVR issues.
Didn’t we have an article here yesterday on disruptive innovation? To ignore quarterly profits and ignore your current customer base and boldly strike out with the best products?
I am mention this not because I liked the Quikster idea – I hated it. But to point out that being innovative is hard. Any big radical plan will stir up the pot.
As to management – All I can say is that they had the good sense to boldly put forward a plan – and then quickly kill it.
the LA times says http://latimesblogs.latimes.com/money_co/2011/10/consumer-confidential-netflix-shares-plunge-subscribers-food-prices-grocery-bill-meat-grain-halloween-masks-recall-target-fro.html they lost 800,000 ending with 23.8 MILLION subscribers.
so they went from 24.2 to 23.2 million subscribers... and the rate change -huffington post http://www.huffingtonpost.com/2011/07/12/netflix-price-subscription-plan_n_895779.html was from 9.99 to 15.98?
so before, they had 24.2 million at ten bucks a month, now they have 23.2 million at 15.98?
every day http://en.wikipedia.org/wiki/Special:Random
They really should have taken a page from Apple. When the music labels tried to strong-arm iTunes pricing in the early days, Apple just laughed at them and said "No. You'll take what we give you, and you'll like it." They could do this, because the iPod, and thus iTunes, was by far the most wildly popular digital music platform in the world, and they knew they had all the bargaining leverage against the labels that they needed
Netflix is in the same boat. They are far and away the biggest streaming platform around, wildly popular, and almost ubiquitous at this point. At least in North America. Who can compete with them? Blockbuster? Their platform is a joke. Hulu? Nextflix is (was) not much more per month, and Hulu still forces ads on you and has asinine and frustrating device playback restrictions on certain content, mainly because they're run by the media companies. Netflix should have all the muscle needed to force their way around the studios.
What they lack, is a strong personality like Steve Jobs in their leadership, who had no issues playing hardball with anyone, anytime.
iTunes was able to negotiate price because they were by far the second most popular method of getting music. The most popular by far was copying (not sharing) music for free. People were still going to buy Apple's hardware whether Apple had a music store or not. Netflix doesn't have that luxury. They must have the content or else they will have nothing to sell.
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No one seems to remember that the user backlash really started with the horrible watch instantly page redesign (replace text with large movie posters, require mouse-over to see what anything is, slow autoscroll on mouseover rather than a push-button advancement, can't read the posters while autoscolling, no more sortable view, etc) and arrogant corporate response. Look back at the blog - there were 5000 extremely negative responses before comments got turned off and the only response was something to the effect that the new page design was really better and the customers didn't know what was good for them. For me, that was the first indication that the people in charge at Netflix 1. didn't know what they were doing (at least when it came to GUI usability) and 2. had a completely tin ear for customer complaints & service. It really primed the pump for subsequent rage following future bone-headed moves.
Well, every time my wife catches me watching it, I certain pay for it.
SJW: Someone who has run out of real oppression, and has to fake it.