Netflix has caught serious backlash over its recent breakup with Starz, price hikes and decision to divide the company into Netflix, the streaming company, and Qwikster, the DVD delivery company. With subscribers jumping ship and the company free falling on Wall Street, more trouble is coming: Blockbuster and Amazon are preparing to up their movie streaming games. Will Redbox be next?
With subscribers peeved and stocks crashing, Netflix is scrambling to find its footing. CEO Reed Hastings’ even took to the net, posting an apology to users on Sunday, Sept. 18, along with a video (below) — but it didn’t help. Fans remain in a fury over changes to the company, giving Blockbuster just the opening it needs for Friday’s big unveiling of their “Stream Come True,” which they promise will be “the most comprehensive home entertainment package ever.”
The trouble for Netflix started this summer, after the movie rental company lost its relationship with Starz and doubled the cost of their services: Instead of paying $10 a month for all-you-can-stream online movies and endless DVDs by mail, members were forced to buy two plans, each $8. The move was a money saver for those using only one service, but members taking advantage of both were hit with a $6 price hike.
With a backlash already heating up, Netflix CEO Reed Hastings took to the net. “I messed up. I owe everyone an explanation,” he posted Sunday. “It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes.”
“There are no pricing changes (we’re done with that!),” he added later. “Members who subscribe to both services will have two entries on their credit card statements, one for Qwikster and one for Netflix. The total will be the same as the current charges.”
The fact that Netflix and Qwikster will still cost the same didn’t sooth angry subscribers, nor did the reveal that the split will allow Qwikster to take on video game rentals. Instead, the apology seemed to make members even angrier. With the Facebook responses to the post at almost 25,000 and Twitter afire over it, members are downright furious, expressing themselves with expletives, abuse and sarcasm.
Blockbuster: A stream come true?
Talk about timing. With customers turning on Netflix, Blockbuster — which filed chapter 11 and then became a division of Dish Network — is ready to give movie lovers a new place to stream.
When the backlash first heated up, the rental spot offered a special deal to lure Netflix expats over. Now, they’ve announced a big press conference for Friday, dubbing it a “A Stream Come True” and promising “the most comprehensive home entertainment package ever.”
Netflix played a big part in Blockbuster’s demise, along with Redbox. Now that Blockbuster has Dish behind it and is getting into the streaming market, however, it could once again be anybody’s game. We”ll have to see what Friday brings.
Down the road, Amazon is also sure to expand their video streaming service, which is unlimited for Prime users and also works on a per-rental basis. The megasite is preparing to launch a video-friendly tablet, which means they’ll have to answer the call for more streaming.
The Netflix apology
Reed Hastings, Netflix Co-Founder and CEO, and Andy Rendich, CEO of Qwikster, talk about the changes, the backlash and the future. Those still on the fence about the drama at Netflix, or just confused, might find some clarity:
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