Netflix (NFLX) is still unwinding itself from the recent price hike that so infuriated some people.
In a blog post yesterday,�the company’s chief executive, Reed Hastings, writes that he “messed up” when the company announced changes to its pricing for DVD-by-mail rentals and online streaming of video.
That move had caused the company to have to lower its September-quarter subscriber estimate, as some users may have quit in protest over what amounted to a price hike. The shares plunged last Thursday as analysts�cut their estimates for Netflix in response.
Hastings said he hadn’t carefully explained the new price structure, a result of arrogance, and he said the company will re-brand its DVD-by-mail service as “Qwikster,” and will call the streaming portion “Netflix.” Netflix will add video game rentals to Qwikster, something users have been asking for, wrote Hastings (and that Blockbuster (BLOAQ) already offers).
Netflix shares today are up $4.08, almost 3%, at $159.27.
My take: This is odd. After apologizing for a price hike, Hastings goes directly into a brand-marketing lecture that has nothing to do with customer satisfaction, but is merely a promotion of his company’s marketing. Hard to imagine this soothing any hurt feelings out there. Netflix made a very successful extension of the brand from the old stuff — DVDs — to the new stuff — streaming. They probably shouldn’t have messed with that.
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