All’s been quiet on the Netflix front for a week or so, so it shouldn’t have come as a surprise to anyone when the company made an unexpected announcement early yesterday morning (emphasis mine):
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.
In a separate press statement, Netflix CEO Reed Hastings said, “Consumers value the simplicity Netflix has always offered and we respect that. There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”
I have to admit, as puzzled as I was about customer apoplexy over splitting the service, turning back now surprises me even more. Changing their plan this quickly — again — could make the company seem skittish in the eyes of investors, and that’s a risk Netflix can’t afford right now. Shares of the recently embattled have lost 58 percent of their value since increasing prices in July.
But in the spirit of Occupy Wall Street, forget about that; what does this mean for customers, besides the cosmetic quasi-convenience of having all services under the same logo?
The bad news is that Netflix is standing firm on its price increase. Separate charges for DVDs and streaming content are here to stay, whether we like it or not. Secondly, the company’s perceived weakness will surely hurt them in negotiations with content providers like Starz, just as Netflix needs to appear strong, and that could spell higher rates in the future.
Fear not, though, because all is not lost. As the rest of this morning’s Netflix blog post points out, the company is aggressively adding streaming content, with 3,500 new TV episodes in the last few weeks alone. This is anecdotal, but when the services split, several friends told me that they dropped Netflix streaming in large part because streaming selection is too limited. Given the right negotiation conditions, we could be looking at much more variety in streaming content a year from now. If that happens, streaming customers will return.
One final note for the gamers out there: Nothing in Monday’s statements suggests that Netflix is pulling back from the expansion into video game rental that was to accompany Qwikster. That will certainly be a good source of revenue and good will, just when the company needs it most.
The biggest problem with splitting the service across separate sites and accounts is customer usability. Splitting the search, the catalog, the queue and the recommendations across two separate websites is a major sacrifice in both usability *and* utility.
If I want to add a movie to my DVD queue and see that it’s available online, maybe I’ll watch it online. If I want to watch a movie online, but it’s not available that way…but it *is* available on DVD, then I can add it to my queue. There’s a reason that Amazon listings always link to other editions of the same product (hardcover/paperback/Kindle for books, DVD/Blu-Ray/VOD for video, CD/MP3 for music, etc.)
And it would be foolish to separate the recommendations into “stuff I like to watch online” and “stuff I like to watch on DVD.” That would make the recommendation system a lot less useful.