DVD, DVD Rental, Media, Netflix, price increase, Qwikster, Reed Hastings
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I lied today. I had to lie. Netflix gave me no choice. Today I canceled our Netflix membership and afterward they ask me why I was canceling. All the choices for why I was canceling were designed to avoid identifying the real reason I, and one million other former members, have quit. We don’t want to be victims of Netflix investors anymore.
I would have said so in their survey, but Netflix doesn’t even give an ‘Other’ option. That tells me that they don’t want to hear why people are really quitting. I can understand why. It’s easier to tell your investors that every customer is asked why they quit and none of them said, “because you screwed me”…or some more appropriate answer that clearly identifies the unacceptable aggressive profiteering decisions made by Fortune magazine’s 2010 Business Person of the Year, Reed Hastings.
On September 18, Hastings made a rambling, PR spun statement that sort of acknowledged the growing customer anger at Netflix, but then put the blame on the customers. Basically Hastings said that, yes, my monthly service fee was increased over 40% in nine months, and yes, the included streaming video service became an extra fee, and yes, the main supply of premium movies, the Starz Network, has pulled the plug on Netflix, but it was all a big misunderstanding…by the customer. Had he (Hastings) just explained he was going to jack up the fees and split up the service for an extra cost beforehand, all of us silly customers would be happy.
I’m not happy and it has nothing to do with Netflix’s communication skills, or lack thereof. Dramatically increasing prices in the 2011 economy not only shows incredible arrogance and insensitivity, it demonstrates that Hastings and Netflix is completely investor focused. He is positioning the company for profits and corporate bonuses and let the customer be damned. My guess is that the ‘apology’ was geared to appease investors when Netflix stocked tanked a couple of weeks earlier after Starz jumped ship.
I would expect that the next shoe to drop is downsizing. Less customers service, longer DVD turn arounds, and poorer customer service as Netflix looks to shore up profitability by cutting labor costs. Greed is good, and when you’ve sucked the customer’s goodwill dry, then you sell the company. This is a good time for customers to divest their interest in Netflix.
Reed Hastings has the last laugh. When a customer quits Netflix, they cut off service immediately….even if the customer has paid for the next month, so congratulations Mr. Hastings, I guess that makes you the winner.
Original article first published as
Netflix Member Since 2007…No More
Karin K said:
Paul, so what, if any, service will you use? I need suggestions.
I was as annoyed, disappointed and as angry as anyone about the Netflix changes, but to be honest, I have yet to find a comparable or better service. Sure there are cheaper services, but where can you get the functionality of the Netflix website and the ease of use?
It is amazing to me that companies just can’t get this right. From Cable companies to DVD shops (i.e. Blockbuster) they all had their chance. What’s wrong here? Netflix had a good thing…a GREAT thing. Why mess it up? Steve Jobs may have believed the customer didn’t know what they wanted, but in this case we have a pretty good idea of what we want, we just can’t seem to get it!
Paul Kiser said:
For now we are not replacing the service. I agree that there is a great opportunity here and no one has stepped up. The basic problem as I see it is that all the major players that could easily take advantage of Netflix blunders are serving the same investor deities as Netflix, therefore, no one wants to step in with lower fees and better customer service for fear of missing next quarter’s profit target. This means the opportunity is solely in the hands of a new player in the game. I still think that the strategy at Netflix has been to boost up the profitability of the company in order to sell it for top dollar to some sucker who thinks they can get even more profit out of the customers wallet.