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SPLG

Reed, I wonder if you'll be CEO much longer. I think you'll be pushed out the same way David Neeleman was at JetBlue. Another great visionary who knows how to build great ideas into great companies but then wasn't a very good manager in the long term.

Not sure if you realize that you can't send out a mass email to customers that sounds like you wrote it on your laptop that morning in your pajamas. Not at a multi-billion dollar company. There's only one CEO who gets away with doing whatever he feels like and that's Steve Jobs. I can't think of many others though that prove out in the long term.

SPLG

And sorry if that sounded dickish, I am calling you a visionary please note. I just don't think visionaries are often very good managers...

Justin Hinkle

I still think that while this was a bad PR move (horrible communication), long term this is the correct move for the company (if it wants to be streaming only).

Why is the new name and site of Qwikster unrelated to Netflix? Because soon it will not even be owned by Netflix. They aren't letting DVD die a slow death with them, they are preparing an entirely new company to be either spun off or bought out by someone else (with its own fully functional web domain!).

Netflix also would no longer have to deal with the DVD conversation being any type of issue in the licensing agreements with content companies (which was its own kind of bad PR).

I'm not saying there won't be challenges ahead after the horrible PR, but I think that I have had the same movie sitting on my shelf for a month and am mailing it back as the last rental from the DVD side.

The streaming side gets bashed all the time for its "horrible" selection, but truth be told, I have never run out of things to watch. Its just a different beast now than when it was about getting the latest new release (for which I can get codes to get cheap and free at Redbox when I am in the grocery).

Justin Hinkle

As a side note, when companies like Sony (STARZ) that had a off-switch trigger for number of online subs, splitting the DVD and Streaming into 2 plans (much less 2 companies) reduces the number of streaming subscribers automatically since before this, there was no DVD only subscriber. (not that this means we will automatically get SONY movies back).

Bob

Don't worry about sounding dickish, SPLG. It's not as if he's reading -- or gives a crap about -- anything you write here.

Mark Van Dyke

Must be the same 10 investors who will be buying up the devalued stock and then making a killing later when it rebounds or when the company is sold off, merged, or re-imaged.

I don't think it's funny at all.

John L. Dough

Reality Check - Netflix lost less than 3% of their subscriber base in light of recent changes. This rounds out to just under 1 million selfish, entitled cry-babies they won't have to deal with anymore.

Netflix just expanded to Latin America - 43 Countries to be exact. This expansion alone is enough to compensate for that in the long term.

Ultimately if Latin America, or any other global expansion for that matter is successful enough, The US business will be all but a PR project to make the company look good to its remaining US investors.

Between the state of the economy in the US, the overall trend of "hating on whatever is new in the media" and the fact that content companies are greedy and lack vision, I would not be surprised if the real revenue and share value comes from elsewhere in the future.

Look at the big picture - How many people are there in THE REST OF THE WORLD.

You'll be whining a lot more when they are enjoying all the good movies because you were too stubborn to stick with a company as it rolls with the punches.

Take a few minutes to think about how everything else in your life is effecting you, and stop your whining about something as trivial and first world as your internet movies.

BoB

@John L. Dough,

It does not matter how many markets you are in, what matters is profit to shareholders.

Since NF announced the price increase/split of DVD & streaming, Qwikster, 2-face apology, loss of Starz... NF stock has PLUNGED from $304.79 down to $128.50 today!

That's a 58% loss in value. But guess who cashed in hundreds of shares back in the summer before all these announcements? Yep, Reed Hastings.

A fool is born every minute.

RJM35126

NFLX has lost $9.25 billion in marketcap since the price increase & subsequent screw up.

Its like the non-integration was TRYING to tick off both customers & shareholders as much as possible !

I get a lot of the arguments for raising prices. I really do.

Their are no arguments for non-integration of customers of both.

And the NAME of the spinoff ? Almost like a bad april fools joke.

MattChance

"It's not as if he's reading -- or gives a crap about -- anything you write here."

Right, because he wouldn't care what his most enthusiastic customers thought about his company on the most well known Netflix commentary/news website. I'm sure he's never heard of Hacking Netflix.

AtomicBuffalo

Visionaries cannot be swayed, only sidelined.

He'll get the next quarter, at least, and probably the one after that. Netflix has its player on a lot of devices, and that access is compelling to content owners who think there's more money they're not already getting through existing windows. That doesn't bode well for the hot new content, just more leftovers, unless Netflix embraces a PPV or tiered model for content and pitches itself as a (better-paying) replacement for one of those windows.

In other words, there's still time for Reed to make a few more bold/crazy moves that piss off existing subscribers (and maybe interest new ones) before he's crowned or canned.

But the rosy glow that Netflix had with existing and potential customers? I doubt they'll ever get that back.

Galagatron

His "I don't blame them" is just another one of his fake expressions of understanding.

ScottZ

Netflix isn't doing this because they want to, they are doing it to sell of business.

FrankR

Quite frankly what Netflix has done is one of the greatest marking blunders ever, on par with new Coke. Netflix over the years had built up a pool of positive feeling by users and they blew it. The price increase was an issue, anytime you have a 50% plus increase for a service or product you are going to get some back lash, scrutiny, but the tone of their announcement is what I think most people objected to.Essentially they tried to pass the increase as if it they doing a favor to the user. The attitude of Netflix when users started to complain was so what we know we will have a few disgruntled customer so big deal. A million lost subscription in two months is a big deal, it also indicated that most likely there still a significant number of dissatisfied customers that will leave in the coming months.
The latest move is crazy because on top of the price increase now they are taking away the familiar experience that user have become accustomed to and replacing it with the requirement that customers interact with two sites. If customers have to interact with two distinct sites, why not Blockbuster or Facets? They have given users the excuse to look elsewhere. Maybe DVD is dead, but it still is the largest part of Netflix business and the largest cashflow generator. Netflix pretty much dominated the DVD rental business, with action they have give new life to their competitors. I also think some folks may be right and they are thinking of selling the DVD business which is labor intensive and requires multiple locations to cover the USA in a timely manner, but that is its value, the infrastructure is set and thats why Netflix managed to beat off competition. The cost of the infrastructure and develop efficient systems to cover the country prohibitive. Streaming well that is a different story the cost of entry not so high on the infrastructure end, a bunch of servers and fiber and you are good to go. They could well be opening the door to a competitor that is better liked and connected to studios or the studios themselves, since as a streaming service they will have nothing to distinguish themselves.
The best advise to Reed is if you are in hole and want to get out the first thing you do is '' stop digging''.

Russell Brazil

My big problem as a consumer of Netflix is the separate websites. And why would it matter to come up with a new name for the DVD business if they are spinning off or selling the DVD business. The Netflix name has branding power. Blockbuster DVD Kiosks are not even owned by Blockbuster...they are owned by NCR. Many separate companies integrate their websites.

I have already gone ahead and cancelled my DVD portion if my Netflix plan. I am keeping streaming for now, but will also highly consider Hulu and Amazon Prime at some point I think.

Lonny

I want Michael Pachters Job! Who else can make a career out of being wrong about all things Netflix. Now he is theorizing Netflix wants to sell the Streaming biz to Amazon!

How does he continue to be so wrong so often, yet quoted in every negative news piece about Netflix as being an authority.

Who the hell is Wedbush securities anyway?

Clay and Deanne Broughton

Well I have another option I am looking into if Blockbuster's announcement won't be including a unlimited streaming plan. Did you know that they make DVR like a Tivo that don't require a subscription? Yeah I have had my eye on this one and gets good reviews too:

Channel Master CM-7000PAL - Digital TV tuner / HDDr

I recently bought one of their digital converter boxes which is much better than the other boxes I have purchased. The clicker is superior for sure.

They sell for 250ish to 300. If I sell my old Rokus since really the only channel on the Roku which was worth watching was Netflix so if I won't be streaming Netflix I won't be needing them. Sell the Rokus on Craig's List to help pay for the new DVR. Roku must be scrambling too with all of this bad press and actions on Netflix's part.

Then when I just have to have a new release head out to my local grocery store for Redbox.

Even if I paid cash for the DVR in one year I will have recouped the cost of it since I was renting 3 dvds at a time at the cost of about 25.00 a month. If I sell the Rokus for 75.00 I will be able to break even in maybe 8 months.

I really do believe more trouble is ahead fro Netflix and if the content sellers don't burst their bubble by refusing to sell content to them then the telecom companies will put a cap on streaming and start charging more for dsl and that will get them. But right now they want to make it really more problematic for me as a user with two sites so that is also going to get them with users.

Can you rely on Amazon, Google or Blockbuster to offer better deal. Not so much right now and until they do you can use a dvr without a subscription to do it.

I do think I put lots of movies in my Qs that are not my first second or third picks but the best ones I can find and I spend way too much time watching stuff that isn't that great. Instead I can do it for free after 8 months with network tv with my free antenna.

I also have tons in my Q that have yet to be released and that has been growing and growing.

Also you can save your Q pages on a word document when you switch to know which movies you wanted to watch. You also can save all the dvds and streamed movies you have already watched on word document too to know which ones you have already watched and how you rated it. So moving your information is possible and not all is lost when you migrate away from Netflix.

John L. Dough

Again, you all fail to see the big picture. The DVD business is a thing of the past. It costs the company way too much and sees less and less profit everyday.

@FrankR it is absolutely absurd to say that the DVD business is where Netflix makes it's money. Netflix has been doing DVDs for almost 15 years now, and the stock went up a measly 10 pts per year at BEST during the DVD only days. Post streaming, the stock tripled and even with it's current market price is HIGHER than the DVD-ONLY days.

The best conspiracy theory I have heard so far is that Netflix is preparing to sell-off the Qwikster brand. Who knows? Maybe Carl Icahn will come in and take care of business like he did for Blockbuster.

The reality is Netflix still has 97% of its subscriber base, no matter how much complaining you do. The Canadians aren't complaing, the Latin America customers aren't complaing. The % of Hybrid plan customers is not important enough to even look at anymore.

The plain and simple truth is that Netflix needed to make this change. Customers were paying far too little for far too much. If you are truely naive enough to think there is a better deal out there then you are just in some form of spiteful denial. Feel free to go back to Cable. Feel free to pay more for a crappier library at Blockbuster, Feel free to rush back and forth between Redbox to avoid paying late fees. Netflix doesn't have contracts and will always be waiting for you when you restart your accounts.

With Netflix you pay for convenience and a large volume of titles to choose from. At 7.99 for Streaming, the average person watches over 300 titles per month. Even if the content is B how on earth are you going to get that amount of entertainment out of redbox? Are you telling me that an A movie that is 2 hours long provides more entertainment in a 1 month period than 10 B movies?

If you don't want to pay for the DVDs anymore, then stop paying for them. It's a dead technology! If you are okay with PPV for new releases, sure go with Blockbuster or Amazon. But that just goes to show how blind you truely are to the economics of these services.

An absolutely unreal value has been converted to a more realistic good value. I wish people in America were more passionate about things that actually matter.. Like Oil prices and Healthcare reform.

gir

I think you're wrong. I think all of what is happening is because of increasing streaming (licensing) costs. They're doing everything they can to increase streaming revenue and cut streaming costs.

DVD rental is the solid side of the business. The DVD side of the business is the part that has seen price *decreases* and subscriber *growth*.

John L. Dough

Henry Ford said, 'If I listened to my customers we would all still be riding horses.'


What is your Idea of Growth? Streaming has gained over 10 million customers in less than a year.

Streaming is Netflix.

DVD+Streaming customers are the minority

Streaming only is the vast majority, with DVD only a close second in light of recent changes. The only reason there were so many DVD+Streaming in the past is because there was no option for DVD only.

Netflix will continue to thrive after the media gets bored with their crucifixions. Investors outside the US will begin to play a major roll in global expansion and revenue from all countries combined will continue to fuel the content purchasing battle.

Alexa Matheson

Ford said "If I'd ask my customers what they wanted, they'd have said a faster horse". Meaning: they wanted faster personal transportation, not a faster horse.

@ John Dough, most of what you said is not fact, but probaganda.

John L. Dough

Your 1 line sentence to discredit me isn't even spelled accurately for starters. It would also help if you pointed out some of this Propaganda that you speak of, if you truely wish to be taken seriously. My previous statements are all based on reality. Whether or not you like the reality is clearly not important. Netflix is not going out of business anytime soon, nor is their competition doing anything better for the industry. When everyone finds a new topic to bitch about, we'll all be watching movies just like we were 3 months ago. I don't feel sorry for any of you. If you are on welfare and can't afford the price increase maybe you should sincerely take a look at what you are spending your money on. Maybe quit smoking?

I'm done with this pathetic excuse for a debate. I'm sure glad all you cowards sold me your shares for so cheap. I'll be laughing in a couple months when I cash in.

Alexa Matheson

"my previous statements are all based on realilty". Any one with half a brain knows what a real idiot your are. You quote Henry Ford inccorectly. Anyone who knows how to use a computor can get an actual quote in a matter of minutes using a little thing called a computor. Weather or not I choose to spell any word corectly is irrevalant. It doesn't negate the fact that you are full of sh*t. You state DVD+streaming are the minority. Netflix's website says differently. You streamers are in the minority. There are about 25 million subcribers to Netflix as of July. 12 millon are dvd+steaming. 3.2 million are dvd only and about 8 million are streaming only, Source: NETFLIX. So the majority of Netflix get those old school disc. You probagandist always say things like "why don't you complain about gas prices". When I hear this it reminds me of that Gecko commercial where they show that guy living under a rock. You John L. Dough live under a rock and just don't get it. Yes I spelled Pro agandist that way to prove what a dolt you are.

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