Netflix changes its mind.... again

Remember my previous posts on Netflix's bad moves in price hikes and splitting the streaming and dvd services? Well now they've changed their mind again based on customer complaints and are staying the same, but keeping the price hikes.

I know they're trying to please customers, but even worse than making irrational, unpleasant changes is staying inconsistent in your brand by going back and forth of the teeter totter. Netflix has a lot of damage control to do, and the Marketing, Public Relations people aren't doing a good job at it so far.

What do you think? Is Netflix making the right decisions?


Here's the letter Netflix sent out with its most recent announcements:

Dear Harmony,  

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password…in other words, no Qwikster. While the July price change was necessary, we are now done with price changes. We're constantly improving our streaming selection. We've recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we've added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS. We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.

Respectfully,
The Netflix Team

Netflix redeems itself... sort of

Back in July I wrote about Netflix's decision to split the prices and charge separately for instant viewing and delivery by mail. I felt satisfied, as I am sure many other Netflix customers did, when I recently saw an article on the extreme drop in Netflix customers after its announcement on the price changes, which went into effect this month.


Now, Netflix co-founder, Read Hastings, has sent out an apology letter to all members and opened a forum for discussion on a similar blog post. Watch the video announcement at the end of this post. Here's an excerpt:

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.

Turns out, Netflix is renaming its direct mail service Quixster and keeping the name Netflix for streaming.

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.

Personally, I don't like the new Quickster logo, but I understand their reasoning, branding-wise. They would have been smart to hold off changing prices until the announcement about the new brand, though. It might have saved them a lot of complaints.


The problem remains, however, that people like things simple. Netflix was the original "have movies sent to your home" service, and it was one of the first to offer streaming of movies online. I think a lot of people liked Netflix because it combined the two and made it simple. If Netflix wanted its new branding to work, it would have kept the Netflix name for both streaming and direct mail, but started a new streaming/instant brand and worked that up separately without the Netflix association. Then they could have slowly weaned out the instant on Netflix and referred people to the new brand.


So, while this new announcement and apology has redeemed Netflix in some ways, it has made things worse for them in other ways.


What do you think? Where did Netflix go wrong? Did they have the right idea for all these changes?
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One GIANT bad move by Netflix

Money is important, and cost hikes are inevitable, but a recent move by Netflix to raise prices for those who want both mailed-to-home videos and instant streaming may be losing it more customers and losing more money than gaining.

The change (see below), which was announced by email and on the Netflix Facebook page, has received over 13,000 Facebook comments on the Facebook announcement, most of them negative. Users are declaring they will drop Netflix for Hulu Plus, Amazon Prime, or Redbox if Netflix does not get rid of the change.

On a move (or lack of movement) almost as bad as the announced change, Netflix has yet to respond to the negative comments.

Marketing choices are difficult to make, and may require higher prices, but without good public relations, those decisions will hurt, rather than help a company. This is why clear communication is so important, as is having a prepared response for negative reactions. It seems Netflix has failed big time here.

Will Netflix users keep good on their word and drop the service? Are there any positives to Netflix's actions?

Read the Netflix announcement I received below:

We are separating unlimited DVDs by mail and unlimited streaming into two separate plans to better reflect the costs of each. Now our members have a choice: a streaming only plan, a DVD only plan, or both.

Your current $9.99 a month membership for unlimited streaming and unlimited DVDs will be split into 2 distinct plans:

Plan 1: Unlimited Streaming (no DVDs) for $7.99 a month
Plan 2: Unlimited DVDs, 1 out at-a-time (no streaming) for $7.99 a month

Your price for getting both of these plans will be $15.98 a month ($7.99 + $7.99). You don't need to do anything to continue your memberships for both unlimited streaming and unlimited DVDs.

These prices will start for charges on or after September 1, 2011.

You can easily change or cancel your unlimited streaming plan, unlimited DVD plan, or both, by going to the Plan Change page in Your Account.

We realize you have many choices for home entertainment, and we thank you for your business. As always, if you have questions, please feel free to call us at 1-888-357-1516.

–The Netflix Team