Opinion: Netflix rolling snake eyes

Mike Crissman

Mike Crissman

Mike Crissman is a junior newspaper journalism major and columnist for the Daily Kent Stater. Contact him at [email protected]

“Qwikster” — what a stupid word. What does it mean? Why is it spelled like that? More importantly, why would any company whose brand is a household name ever decide to switch the name of its product to such an unknown term?

That’s just what the popular movie rental service Netflix decided to do this week when its CEO and co-founder Reed Hastings announced a business decision that puts the future of the once strong company in doubt as it now finds itself reeling in a downward spiral of customer backlash.

“I messed up. I owe everyone an explanation,” Hastings began in his mass email to Netflix’s 24 million subscribers Sunday in an effort to clarify the company’s bold changes that began two months ago. In July Netflix announced that customers had to start paying separately for their DVD delivery service and their on-demand Internet streaming, which hiked prices 60 percent higher.

Dissatisfied customers left. The company’s stock numbers plummeted; its market value, cut in half. Netflix needed an answer. This week the CEO delivered it.

The company will split into two services. The first one, the instant stream, will maintain the Netflix name. The second one, the DVD-by-mail service (the very thing Netflix became known for, the same thing the Netflix brand was built on), will henceforth be known as “Qwikster.”

Re-naming an established brand at the peak of its popularity is a highly questionable marketing move, especially changing it to a name that sounds like some dumb new-generation Pokémon. It’s definitely no Charizard. It’s like changing “The Jake” to Progressive Field – nobody accepts it.

Now a subscriber who wants both DVDs in the mail and instant streaming will have to go to two different websites to maintain two separate accounts, handling movie requests, billing information, account changes, etc. in two different places.

Netflix estimates that by the end of the month less than 10 percent of its U.S. customers will subscribe to DVD-only plans. The company is betting on on-demand streaming to be the future of movie viewing, as physical video formats will become less popular in the rental business.

Netflix has dominated the home-video market in recent years, even causing longtime giant Blockbuster to file bankruptcy last year. The company must tread lightly if it wants to avoid alienating its loyal base of subscribers.

The instant stream service of $7.99 per month for unlimited viewing of TV shows and movies is still an absolutely fantastic deal. Now that Netflix has made its power move of shifting its attention to the supposed format of the future, it needs to make sure it beefs up its online catalogue with newer, better movies.

No matter how sudden Sunday’s announcement seems, this is not a hasty move by Hastings and Netflix. It’s a calculated long-term gamble that will either bite them in the buttocks or give them a big fat smooch on the cheek. It’s really up to Netflix. They can choose to take a shower and put on some makeup, or they can just go raw dog.

Contact Mike Crissman at [email protected].