Netflix Apologizes, Announces DVD Service Name Change

I hate to beat a dead horse, but Netflix has again made headlines, this time with a service-wide email that Co-founder and CEO Reed Hastings sent this morning. The first line of the email was a bit surprising:

“I messed up. I owe you an explanation.”

Hastings went on to give a more detailed explanation for Netflix’s surprising price increase that split its streaming and DVD services down the middle. It is about as much of an apology as Netflix users are going to get. The intent is not to undo the damage that was done but rather to explain the reasoning behind it.

Netflix sees itself as progressive, being able to advance from mail-in DVD service to streaming in a relatively short amount of time. Other companies have struggled to adapt their products as the markets changed, but Netflix believes it can survive this.

The next step for Netflix is to thoroughly distinguish its streaming service from its DVD service, and it will do that by renaming the DVD service “Qwikster”. Those customers who have both services will even see separate billing from Netflix (the streaming-only service) and Qwikster (the DVD service). The company also plans to add video game rentals to Qwikster, allowing subscribers to rent Nintendo Wii, Sony PlayStation 3, and Microsoft Xbox 360 games for an additional fee, similar to the current Blu-ray add-on fee.

It was a humbling letter for Netflix, a company that once seemed to be incapable doing wrong in the eyes of many of its loyal users.

“Both the Qwikster and Netflix teams will work hard to regain your trust. We know it will not be overnight. Actions speak louder than words. But words help people to understand actions.”

Maybe those users who are sticking with Netflix can now have some closure and move on. Netflix is now a streaming-only service. If you want DVDs, you will have to subscribe to Qwikster.

MSL Group & Zeno Group are among the PR companies that have collaborated with Netflix.