Farewell, Qwikster, we never got a chance to know you. And maybe that’s a good thing.

That’s no doubt the sentiment among many Netflix subscribers this morning after the company abruptly reversed its plan to spin off its DVD-by-mail service into a new site.

The change would have required many Netflix users to maintain two accounts, with different logons and ratings/review systems, separate from the Netfllix streaming service.

“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,” writes Netflix CEO Reed Hastings in a post this morning. “This means no change: one website, one account, one password… in other words, no Qwikster.”

The bad news: The price hike instated by the company in July remains in place, with streaming and DVDs billed as different services, costing cumulatively more than they did as a package.

Hastings had unveiled the Qwikster plan in the process of apologizing for how the company communicated that price increase.

Comments

  • Gus2057

    I became a Netflix customer shortly after they started up.  I bragged to friends about the service and many signed up.  I did the same years ago when AOL was just starting.  I was loyal but AOL’s service faltered.  I found a replacement for AOL.  Netflix seems to be following in AOL’s footsteps so now, as of this month, I don’t subscribe anymore.  Didn’t AOL have about 25 million subscribers in their day?

    • Guest

      http://ir.aol.com/phoenix.zhtml?c=147895&p=irol-SECText&TEXT=aHR0cDovL2lyLmludC53ZXN0bGF3YnVzaW5lc3MuY29tL2RvY3VtZW50L3YxLzAwMDExOTMxMjUtMTAtMjQ1MjQ5L3htbA%3d%3d

      “Subscription
      revenues declined 26% and 27% for the three and nine months ended
      September 30, 2010, respectively, as compared to the same periods in
      2009. The decline was due to an approximate 24%
      decrease in the number of domestic AOL-brand access subscribers between
      September 30, 2009 and September 30, 2010 (which is discussed further in
      “Overview—Our Business—AOL Properties”).
      “The
      number of domestic AOL-brand access subscribers was 4.1 million and
      5.4 million at September 30, 2010 and
      September 30, 2009, respectively. The domestic average monthly revenue
      per AOL-brand access subscriber (which we refer to in this Quarterly
      Report as ARPU) was $18.10 and $18.17 for the three and nine months
      ended September 30, 2010,
      respectively, compared to $18.54 and $18.43 for the three and nine
      months ended September 30, 2009, respectively.”

      I expect that Netflix, having pulled an AOL, will also experience an 80% drop in subscribers during the next 10 years.

  • Buyout

    I guess any buyout attempts of Qwikster fell through

  • FrankCatalano

    At least, in another report, they gave some practical reason for raising
    the DVD price: It costs $1/roundtrip for mailing each DVD. Pity they
    didn’t think through being that specific in the first place.

    However, publicly being so far ahead of one’s customer base as to
    alienate and lose present customers because all you’re viewing is the
    future has led me to use a new term with clients, “pulling a Qwikster.”
    Though the site is gone, I think the name will live on as a cautionary
    tale.

  • Guest

    I suppose this is good, but what of the price increase? The real news will come when Netflix agrees to package its DVD-by-mail service with its streaming service with a discount for subscribing to both. With about 1/8 the selection available on demand, I’d pay about $1 a month for streaming versus $8 for discs.

    • FrankCatalano

      I think another issue is how many customers will come back, regardless, after being jerked around with price increases and the Qwikster debacle. I switched to streaming-only after having had both streaming and DVDs with Netflix. Since then, I’ve rediscovered libraries for classic movie DVDs and Redbox for new films, and probably will never return to Netflix for DVDs even if they do provide a combo plan again.

      • Guest

        I find it interesting that so many would pay $96 for a year’s streaming via Netflix when Amazon Prime streaming is $79 — and the latter includes other benefits as well. The Amazon freeming selection isn’t great, but nor is Netflix’s.

  • http://ClaussConcept.com Jason Gerard Clauss

    Thank. God.

  • Bryan Mistele

    “It is clear that for many of our members two websites would make things more difficult” — Reed Hastings

    Really?  He’s just now figuring this out?  To me, the fact that no one on the executive team or on the board saw this coming ahead of time is shocking.

    • http://geekwire.com Todd Bishop

      Totally agreed, that line is pretty laughable. Here’s my translation: “We knew that for more many of our members two websites would make things more difficult, we just underestimated the extent to which it would piss everybody off.”

      • Bryan Mistele

        I think you’re right – which is amazing from a company that had a reputation for sterling customer service.  What a way to destroy your competitive advantage almost overnight.
        My personal experience: I was their biggest fan.  Bought their stock a long time ago. Then came the price change, which ticked me off and I moved to streaming only. Then the separation of web sites which was a sign they were doubling down on stupid.  I then sold the Netflix stock I had, canceled my service, and moved to Amazon Prime.  Funny thing is, I wouldn’t go back even if they returned the price to its original level.
        Someday a Harvard case study will be written on what drove Netflix to destroy the shareholder value and brand equity they had in this way.  It’s absolutely amazing to me.

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