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Netflix cancels Qwikster DVD rental platform: Has CEO Reed Hastings learned the right lesson?



qwikster.jpgIt was a plan no customer liked using a name some guy already owned on Twitter.

So it may be no surprise that Netflix has walked away from plans to move its DVD rental business into a separate website and service called Qwikster, before the program even began.

But what does surprise is CEO Reed Hastings' willingness to admit a bad idea before it was implemented, bowing to the pressure of consumer complaints and falling stock prices to stop making a bad situation worse.

It was a bad sign that Hastings' announcement of Qwikster a few weeks ago began with an apology -- back then, for implementing the momentous change of altering the prices for DVD rentals by mail and online streaming for Netflix customers. Those who wanted both services would essentially see their bill jacked up by 60-percent. In a recession.

reed_hastings_netflix.jpgSo the CEO doubled down on that idea by moving the DVD rentals to another website and business name entirely, requiring customers to create a new account, with separate logon, password and payment, for that service. Kinda like a boyfriend who accidentally drops the phone number of a new girlfriend while apologizing for cheating on you.

In fact, Hastings made the kind of mistake usually confined to old media companies learning new media; he tried to make his customers accept a change they didn't want to serve his business' timetable.

Many experts believe the DVD -by-mail rental business will fade away over time as Netflix's streaming side gets stronger. But in a world where every tech-savvy customer has a worldwide voice, companies can't push users to accept change on their timetable without serious blowback. And at a time when most Americans are rethinking every dollar spent, does it make sense to antagonize them and destroy a powerful consumer brand by forcing change before they are ready?

NBC learned this lesson the hard way when it tried to eliminate 10 p.m. drama series before viewers were ready. Now Netflix is the latest behemoth to have its hand slapped by its own customers.

With such a significant footprint in the online world, you'd think Netflix would have learned this lesson already. Hopefully, it has now sunk in for Hastings; he likely won't get another major mistake before customers kick him to the curb.

Below, Hastings' misplaced apology from last month:

[Last modified: Monday, October 10, 2011 8:55am]


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