Netflix CEO pledges to screw up even more

by Paul William Tenny

Netflix paper sleeve (

Everyone got down on Netflix for raising prices as much as 60% on all of their plans without providing any increase in value to customers. The excuse was that more free cash for the already hugely profitable company would allow it to buy more streaming content, which is what people really want.

Perhaps that's true, but Starz decided not to renew its deal with Netflix for any price and the net result is that all Netflix plan prices went up and a significant amount of streaming content got an expiration label slapped on it at roughly the same time. Tens of millions worth of content will simply vanish in February 28th of next year and you'll already be paying more money for that benefit.

Reed Hastings admitted that his company didn't handle the price increase very well and yet in the same blog post, promised to screw up even more.

Netflix is virtually splitting its streaming business from the DVD side, which it desperately wants to drop entirely. The old DVD service will be renamed "Qwikster" (which everyone will continue calling Netflix) and will have a completely separate website from the streaming service, which will retain the Netflix name. You can forget about managing your streaming and DVD-by-mail queues from the same interface -- they are now split across two websites.

Although Netflix will finally be adding game rentals, it'll cost extra above and beyond what you're already paying for DVD-by-mail and streaming. The same way you're gouged with Blu-Ray titles.

This isn't surprising. Netflix is doing what any amoral and soulless business does: it's bleeding you to death by charging your for every thing it can possibly think of. The amusing part of it all is that investors would normally reward this type of behavior. Instead, it sent 600,000 subscribers running in the other direction and investors fleeing along with them. Netflix lost $2 billion in value in less than eight hours when that news broke, and the CEO behind it didn't learn a darned thing from it.

in Business, Digital Media


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