Netflix CEO – Idiotic? Or Pure Genius?
 |
Reed Hastings – the hot shot CEO that put us all in awe just a few short years ago. The man that single handedly destroyed the blockbuster empire and road his metaphorical horse into our living rooms with instant streaming capability.
Because of Reed Hastings, we now enjoy unlimited streaming content to all of our devices: the computer, Xbox, ps3, Wii, iPad, iPod, iPhone, Android Phone, pretty much anything that can connect to the internet.
The company got its start by mailing you DVDs in the mail one by one, or more than one depending on your plan, and when you were finished watching them, you simply put them back in the envelope and returned them.
A brilliant business model from a brilliant man, but even Mr. Hastings knew that all good things come to an end. Years ago Reed knew that the internet streaming side would become the primary driving force of his company, the technology and internet speeds just had to catch up with him.
He even named his company “Netflix” banking on this idea.
Recently though, Reed Hastings has been in the spotlight, and he’s been looking a little less like a visionary, and a little more like the business version of Charlie Sheen.
It all started with a price hike
Mr. Hastings started out the month of September by implementing a price hike of nearly 60%, and separating its streaming and DVD plans completely.
Now being a customer of Netflix from the beginning, this was shocking to me. I love Netflix, I don’t have cable, and instant streaming is pretty much the only thing I ever watch on my TV. Before though, I paid $8.95 a month, a number so low that it wasn’t even worth thinking about.
I could watch my favorite TV shows online at any time, and once or twice a week I could get the new releases on DVD or Blu-ray to enjoy with a friend. It was a perfect system I’ve been with for nearly 3 years.
When I heard the news of the price hike, I was shocked really. Most people don’t like you doubling the price, but when you do, at least throw something extra in.
Instead, Netflix decided to more than double the price and TAKE FEATURES AWAY from the public. My Xbox has lost the ability to add DVD’s to my queue – a feature I used quite often.
A tale of two companies?
After its debacle in the beginning of the month, and the major uproar from users throughout the first two weeks – nearly costing them over 1 million users, Netflix, errr, Reed Hastings decided it would be a good idea for the DVD business and the online streaming business to become two separate entities.
In an apology letter for the price hikes, Mr. Hastings snuck in a little tidbit at the end – the DVD-by-mail service would now be called Quickster, and be run as its own separate entity with its own website, branding and all.
It’s been one hell of a month for Netflix.
Why on earth Reed Hastings would give up all of its branding power and go with a completely new brand over an addition to the Netflix brand, I have no idea.
Why Reed Hastings would increase the price, lose features and MAKE IT HARDER FOR CUSTOMERS TO SELECT MOVIES, I have no clue.
Over the past month, Netflix stock has plummeted and lost nearly 50% of its value.
So one thing is for certain, either Reed Hastings is an idiot, has no clue about business, and likes to inconvenience his customers with random decisions during mood swings, OR, he’s a brilliant genius who forecasted the change in the market and took steps to ensure his company’s success.
Only time will tell if this was the right move. Who knows? I could look back a year from now in shock and awe that he saw something no one else saw. So my opinion remains – hes either idiotic, or pure genius. m not sure which one quite yet.
Either way, I just wanna’ see my movies.
What do you think? Idiotic? Or pure genius?
UPDATE – 10/10/2011
So it looks like Reed Hastings is leaning on the idiotic side. I just received this email from Netflix.
Dear Timothy,
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.
This means no change: one website, one account, one password…in other words, no Qwikster.
While the July price change was necessary, we are now done with price changes.
We’re constantly improving our streaming selection. We’ve recently added hundreds of movies from Paramount, Sony, Universal, Fox, Warner Bros., Lionsgate, MGM and Miramax. Plus, in the last couple of weeks alone, we’ve added over 3,500 TV episodes from ABC, NBC, FOX, CBS, USA, E!, Nickelodeon, Disney Channel, ABC Family, Discovery Channel, TLC, SyFy, A&E, History, and PBS.
We value you as a member, and we are committed to making Netflix the best place to get your movies & TV shows.
Respectfully,
The Netflix Team
So, now that means no qwikster? awwww c’mon… We all wanted to have two websites with way more complicated management systems.
Follow Tim on Twitter to stay connected with the latest tips, tricks and links on teh interwebz!
Follow @webvitals
Related Posts
No related posts.