Even if you believe that splitting Netflix into two services and raising prices is the right plan for the company in the long term, the moves in the near term have many subscribers asking whether managers value them.
Many Netflix users are outraged for the second time in the past three months. CEO Reed Hastings offered an apology last night in a letter to customers as well as in a video message for the way the company announced a price increase in July. He didn't say he was sorry for the actual price hike, and more importantly, he also said Netflix was splitting itself into two separate services. The new Netflix will be involved in streaming video over the Web exclusively, while the other service, called Qwikster, will oversee DVD by mail.
Some analysts and customers argue that Netflix has made plenty of other missteps in the past several months. The company couldn't close a licensing agreement with Starz, the pay-TV service that owns Web distribution rights to content from Sony Pictures and Disney. That means Netflix's streaming library will offer even fewer films from the top Hollywood studios. Much of Hollywood is lukewarm about Netflix's business model and the company has struggled to acquire streaming rights for popular films. … Read more