Many of you Netflix customers may have gotten an email or heard it from the news. Netflix' CEO has made a public apology about the recent price change with some further announcement. I think this is the worst apology I have ever seen. I am writing this mainly from a customer's perspective. I wasn't angry about the price change. Nor am I care about their business that much. They've asked me to pick between DVD or streaming. Since only about one third of movies I watch offer streaming, DVD only is the no-brainer option for me. This actually saved me a little bit of money.

What annoys me is that this is an apology that is not an apology. What exactly does Netflix believe they have done wrong? From they email they are absolutely convinced their business strategy is right, and I'm not here to dispute it. I just don't see what are they trying to apologize for? The are not back tracking the price change, nor are they offering any discount or compensation. In fact they are so convinced in what they are doing that they announce further change to spin off the DVD rental into a new company called Qwikster.

Some business pundits are nodding their head and approving of their bold move, often citing Innovator's Dilemma and such. But what is it in for the consumers? All the got is their service being spin into Qwikster, essentially a second rated brand name. The other difference is Qwikster.com and Netflix.com websites will not be integrated, so

if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn't show up on Netflix, and vice-versa.

In other words, you customer are getting screwed. The interest of the company as a business is clearly different from the interest of the customers.

Why bother to write a super long email to the customers if you have nothing to offer to them? Why apologize if you have nothing to apologize for? In the announcement they regret that "many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming". I feel that they have just humiliated us again.

2011.09.19 [business] - comments