Netflix's lost year: The inside story of the price-hike train wreck

[THEANGEL&THEGAMBLER]

Netflix's lost year: The inside story of the price-hike train wreck | Internet & Media - CNET News

Reed Hastings stopped listening, and that's when the trouble started.

In the spring of 2011, Hastings, Netflix's widely admired chief executive, held a meeting with his management team and outlined his blueprint to jettison Netflix's DVD operations. Netflix managers would tell subscribers on July 12 that they planned to do away with a popular subscription that offered access to DVD rentals as well as unlimited on-demand streaming video for $10 per month. DVDs and streaming would be separated and each would cost subscribers $7.99 a month, or $15.98 for both, about a 60 percent hike. The changes would take place in September.

Jonathan Friedland, the new vice president of global corporate communications who had joined Netflix just a few months earlier, asked whether customers on tight incomes might object to the price hike, according to people at Hastings' meeting. Hastings argued that Netflix was a great bargain. He said he knew that some customers would complain but that the number would be small and the anger would quickly fade.

Hastings was wrong. The price hike and the later, aborted attempt to spin off the company's DVD operations enraged Netflix customers. The company lost 800,000 subscribers, its stock price dropped 77 percent in four months, and management's reputation was battered. Hastings went from Fortune magazine's Businessperson of the Year to the target of Saturday Night Live satire.

To Hastings' credit, what he wanted to do made sense. The DVD's best days are behind it. Video streamed via the Internet is slowly replacing the physical disc, and betting a business on a dying product is never a great idea. So Hastings wanted to get ahead of the curve and focus on streaming, to disrupt his own business before someone else did it for him. It was aggressive, far-sighted, and very much in character.

 

[Super Cheech]

Canceled my whole account right before the price hike.

 

[Liquid]

they should have gone through with the idea, the DVD mail in option is for those who refuse to adapt.

Nobody should care about the mail in DVD Service, they should have just handled it better.

 

[Rarely-Wrong Liggins]

It would have went over better if the streaming library was as robust as the DVD mail order service. He liked how that streaming p*ssy felt so much that he blew his load. If he just took it easy and took his time everyone would have been happy.

 

[Arcavian]

It would have went over better if the streaming library was as robust as the DVD mail order service.

This is all they needed


Trying to go the dvd only route was wack as fukk when you find out that an episode of a tv show you just got into was only available on dvd

 

[Hersh]

^^ word-- he coulda done a small price hike-- then further expand the streaming-- all i do is stream but the selection is close to garbage

 

[AquaCityBoy]

They bouncin back tho. Netflix just surpassed iTunes as the most popular rental service.

And I'm sure a lot of people who were initially pissed came back eventually. nikkas was talking bout switching to Amazon and Hulu Plus

But them shyts suck, nikka!

 

[Ethnic Vagina Finder]

Well.. I never wanted DVD rentals so I only copped the online service at the cheap price. Once I saw that their online collection sucked I canceled. And that was before the price hike.

 

[Hersh]

if hbo offered a stand alone stream service >>>>>>>>> like 5 bucks a month id easily drop netflix to re watch all the hbo series--

 

[Nick Barnes]

Like its been said, most of the online stream selections are trash. It's only good for tv shows.

 

[Artificial Intelligence]

..............................

 

[HHR]

I was thinking today about how outrageously cheap Netflix really is. Less than $10 a month for UNLIMITED MOVIES/TV.......insane

 

[Hersh]

theres like 15 good movies on netflix--wtf

 

[the cool]

i have mail in dvd only. my friend has stream only, lets me use his password. so im actually saving a dollar now after the price hike

 

[Champion]

I've had the stream for 3 years now and I have no complaints.

The complaints about the lack of movies is over exaggerated. People just want to watch familiar shyt instead of finding hidden gems or something new.