Tuesday, October 11, 2011

A 'Qwik' Turnaround for Netflix

On Monday, October 10, Netflix CEO Reed Hastings published another post to the company blog, this time surprising both investors and subscribers with the dissolution of the DVD-rental branch Qwikster. Last month, Hastings announced the division of Netflix into two separate companies: Netflix, an online streaming service, and Qwikster, a DVD and video-game rental service. The announcement, which came only 2 months after the company’s new price adjustment, further enraged current subscribers, who responded with 28,000 comments to Hastings post, as well as investors, resulting in a significant decline in stock value. In this most recent post, Hastings acknowledged the frustration felt by subscribers due to the inconveniences posed by the division of the company (i.e. separate queues, separate accounts, separate billing information, etc.), and ended with positive message to subscribers: “We value our members, and we are committed to making Netflix the best place to get movies & TV shows.” He also highlighted the growth of the streaming service, which now includes over 3,500 TV episodes from ABC, NBS, E! and other major networks. This announcement elicited significantly fewer comments (730 compared to 28,000 and 13,000) than the company’s previous two, ranging from praise and appreciation for complying with the popular customer demand to some people calling for Hastings’ termination as CEO of the company. Investor’s positively responded, as the stock rose on Monday after a 62% decline since July. Cheers to Netflix for responding positively to customer demand, demonstrating regret and humility, and continuing to expand the company!

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