This is just a quick note with first impressions. A few months ago, Netflix announced it'd be raising the price of DVD rentals and adding a streaming-only service. For customers like me, who enjoy both, it was a very big price increase.
Netflix' stock has recently taken some hits, and then, tonight, Netflix CEO Reed Hastings, decided to come forth with both a mea culpa and a new name, Qwikster.com. Seriously.
Apparently, Netflix -- in its ultimate wisdom -- has decided that Netflix shall heretofore be known as a streaming service. You can view whatever movies and TV shows the studios are willing to let you watch, until such time as they decide to pull the programs off of Netflix (my wife is still pissed that the Camelot TV series is off Netflix Instant Play after she watched half the episodes).
On the other hand, some of us long-time Netflix users still stubbornly insist on wanting to watch more movies and TV shows than the studios want to allow to be streamed. Since we apparently couldn't be put down by an excessive price increase, the next attempt is to shunt us (shun us?) into a new, old service.
According the Hastings, the Netflix with the little red envelopes that we've all come to know and love is now going to be Qwikster. He says they're going to provide all the same service, but the reality is that someday soon, Netflix (the streaming company) is going to run screaming from Qwikster (the luddite DVD company) as fast as it can.
I certainly respect an entrepreneur for understanding his cost model, but building universal brand recognition is hard. Qwikster, as a brand, doesn't say anything. It's a bad reminder of Napster and Friendster and doesn't have anything, really, to do with movies or videos. Given Hastings' strong branding history, I'm sure he'll make something of it, but I also expect that Qwikster will never be what Netflix was.
I am not sure this is good strategy for Netflix. With the DVD business, Netflix owned assets it actually controlled. With the streaming business, Netflix is at the complete and total mercy of the studios.
Hang in there, Reed, that ride is gonna be a bumpy one.