Netflix screwed up

Yesterday I didn't have time to make a blog post, and now I find that, as a result, I'm probably too late with this post, and literally tens of thousands of people have already said what I'm getting ready to write. But that's never stopped me before, so I'll write about this anyway.

Late Sunday Netflix's CEO posted a blog post and sent an email to all current Netflix subscribers (yours truly included) apologizing for the lack of prior information regarding the recent price hikes (the price hikes themselves he did NOT apologize for, saying they were necessary), and basically saying "My fault." What's truly enraged Netflix subscribers, though, was that--in the middle of this supposed apology--he announced that he was splitting the DVD by mail feature off from the on-demand streaming feature. The streaming feature will continue to be called Netflix, while the DVD by mail feature will soon no longer be known as Netflix and will be Qwikster.com. Users who decide to keep both services will have two separate charges on their credit card and will have two different websites and--to the horror of thousands--two different queues to manage.

Before I go on, let me say that--as a long time streaming only subscriber--this whole mess doesn't impact me one way or the other really. MY service isn't changing at all. Having said that, though, I can understand why people are upset. As I mentioned at the beginning, it's all been said before by other bloggers, so there's really no reason for me to rehash all of it, but here are the main points people are complaining about:

• Having two queues to manage will stink.
• No one's going to remember how to spell Qwikster. I actually had to look it up to write this blog entry.
• Having two charges on a credit card is inconvenient. If you change credit cards, you'll have to change it at both sites.
• You don't announce plans to make your users' lives LESS convenient in the middle of an apology.

More than all that, this goes against every branding practice I've ever seen. Why take a service that has a solid brand name and spin it off into a dumb sounding brand? Why can't both the DVD service AND the streaming service have the same name? They've had them for years, and there hasn't been a problem. And every other company I've seen actually goes out of their ways to ride the coattails of past successes. If General Mills is planning to release a lemon flavored cereal, and there's a way to make that cereal into a round, "o" shape. You'd better believe that they're going to market it as "Lemon Cheerios!" Do the soda companies release new sodas with snazzy new names? Not anymore. They used to release products with names like Mountain Dew and Fresca, but today those would be Pepsi Green and Grapefruit Coke. They USE the brand loyalty.

But not Netflix. They're going to change a product everyone loves to Qwikster. Really? I just had to look up how to spell it AGAIN!

For most of the last 24 hours, in fact, I was certain that everyone at Netflix had gone insane. Was there not one person there who could see how absolutely stupid this idea was?

Then I read something on my lunch break today that actually made sense. A commenter on a news story said there was only one explanation: Netflix was planning to sell the DVD delivery business within the next few months, and what they didn't want was to create a threat to their business. By handicapping the buyer with a dumb name like Qwikster, they ensured that whoever was dumb enough to buy their dying DVD delivery business would struggle to jump to streaming.

It's the only thing that makes sense to me.

It's hard to believe that six months ago everyone thought that Netflix was going to replace traditional cable companies, and now experts are saying that Netflix could be on the way out and are already prepping us for life beyond Netflix. Six months ago I would have thought that crazy, but I honestly don't think so anymore. Amazon.com has a competing streaming service (though it only has about 1/6th of the titles of the already paltry Netflix streaming), and when the Amazon tablet is released in the next few weeks, it's rumored to come with a free year of the Amazon streaming service (normally $79 a year). That makes the Amazon tablet even MORE appealing. At $250 for the tablet, if I cancel Netflix and consider $79 of that price the price I'm paying for Amazon Prime, then I'm really paying only $171 for the tablet.

I think I'm going to sign up for the free month of Amazon Prime to see if the streaming videos that are currently there are enough to pull me away from Netflix.

Netflix, you may have just lost a loyal subscriber...