Perhaps no other company in the media industry is receiving for attention at this moment than Netflix. 2 months ago, Netflix announced that they would be changing their price, resulting in outrage among numerous customers. Fast-forward two months and the price change has resulted in the loss of many subscribers. Just when current customers thought they couldn’t get any angrier, things got a lot worse. Netflix CEO Reed Hastings recently sent out an overnight email to the company’s 23 million subscribers, notifying them of Netflix’s plan to separate its movie services.
Hastings plans to rename the DVD business from Netflix to Qwikster. Qwikster will have its own billing system, website, and list of movies. Current customers are infuriated by this move. Stating how now they will not only have to play a lot more, but they will also have to access to different sources. Angry customers are even threatening to cancel their Netflix subscriptions, arguing that the selection of titles available for streaming is very limited compared to the DVDs.
In my opinion, things are not looking so great for Netflix’s future. Not only are their fans becoming infuriated, but there is also an increasing amount of movies and videos becoming available throughout the Internet. Netflix’s shares have already dropped 7.3% on Monday according to the Nasdaq Stock Market. Hastings says he is willing to endure through the downfall because his long-term belief is that people will become less dependable on DVDs and eventually streaming will take over and make DVDs obsolete. While Hastings remains confident and envisions a successful future, I for one would not recommend investing in Netflix for a while.-Nayef Halloun
thanks for analyzing that development, Nayef. it's weird, because i feel like a lot of these companies think they can get away with anything (remember we were discussing last week how Disney could pull a stunt like the 2-week showing of Lion King 3D and make a huge amount of money from it?)
ReplyDeleteI definitely think Netflix went too far in changing the services they offer- it's no longer the same "product."
I couldn't agree with you more. The internet is filled with pirates who download and watch movies for free! Now they did not only put themselves in a critical position of losing, but they also decreased their customers loyalty by increasing the prices. But I do also think that Netflix has enough publicity to stay on top.
ReplyDeleteThis looks like a bad move on Netflix's part. They are just going to lose customers to other options such as Itunes where you can rent cheap movies right onto your computer. This is not going to work out longterm.
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