Mere weeks ago, Netflix announced the decision to split its company into two distinct ventures. The main company of Netflix was to continue handling video streaming services while the newly created Qwikster was to take over the DVD rental side of things. Now in the wake of customer and investor backlash, Netflix CEO Reed Hastings announced today that the company will remain a single entity and that Qwikster has been dropped.
The split would have essentially created two companies with separate billing and websites for DVDs and streaming services. I initially thought the split was a good idea so long as availability lists and ratings were still interrelated between the two websites. When it became clear that Netflix was planning on the two companies to exist in complete seclusion from one another, I quickly changed my mind. Apparently, most other Netflix customers didn’t share in my enthusiasm at all and began voicing their hatred of the idea the day it was announced with many customers dropping Netflix altogether.
With customers canceling their accounts in droves and Netflix stock dropping at an alarming rate, the company had to rethink its strategy… and fast! As part of the announcment to remain a single company, Hasting announced his reasoning via the Netflix company site by stating that “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.” Hastings went on to say in a recent interview that “There is a difference between moving quickly—which Netflix has done very well for years—and moving too fast, which is what we did in this case.”
Either way, it seems as if Netflix is to remain unchanged for the time being. That includes the recent price changes that went into effect a few months ago when Netflix began charging for what had previously been essentially free streaming video. For many customers, that price change bumped the fees for streaming and DVD plans from $9.99 to $15.98 per month. Alternately, Netflix users could take either streaming or DVD rentals for only $7.99 each for stand-alone services.
So what is Netflix doing to keep customers now that they’ve seemingly angered so many of them? The first step is for the company to secure as many exclusive movie and TV deals as it can. Netflix was off to a bad start in that arena when it lost its contract with Starz, a major supplier of movies and television for the service. However, the company was quick to pick up the pieces. In recent weeks, Netflix announced deal with both Discovery and Dreamworks Entertainment. The Dreamworks deal will allow for exclusive use of the company’s films as well as television specials. Most recently, Netflix signed a deal with AMC to be the exclusive streaming provider of the critically acclaimed zombie apocalypse series ‘The Walking Dead’.
Can Netflix weather the bad press and stay afloat amidst the new onslaught of streaming video competitors such as Hulu Plus, Amazon Instant, and Crackle? The key word here is: content, content, content! If Netflix can continue locking down exclusive deals, I think fans will return to the service once the dust settles.
The SNL cast did a humorous skit mocking the indecisiveness of Netlflix that you can view below.