Netflix CEO releases apology, launches new service
"I messed up. I owe everyone an explanation." That's how the blog post penned by Reed Hastings, Co-Founder and CEO of Netflix, begins. The letter to subscribers of the DVD rental and online streaming video company is heartfelt and honest, but there's already speculation about whether or not Netflix is on its way to solving its problems – or if it's only causing more.
Two months ago, the company announced that consumers would no longer be able to bundle the company's streaming service and DVD delivery service – instead they would have to choose one or the other, or pay for both. This stipulation also came with a price hike, which angered customers, ultimately costing the company $2.6 billion in market valued and prompting stocks to plummet. Now, the company is trying to win back the hearts of its once-loyal subscriber base.
The company's new plan involves separating out the DVD delivery service altogether, making it its own company called Qwikster. Netflix will continue to exist, but will only offer streaming services. Hastings was quick to reassure customers that Qwikster will be the familiar DVD rental website that consumers are used to, bbut with a different name.
There will be some enhancements for Qwikster that aren't part of Netflix's current service. In addition to movies, there will be a video games upgrade options, allowing users to rent and try out games on several popular systems.
Is this the best solution? Comments on the blog are skeptical. "So, the answer to preemptive price hikes is to make your services LESS convenient, too," writes one reader. Another, claiming to be the owner of two video stores, thanks the CEO for helping keep his businesses up and running.