First Netflix increases their prices by 40-60% with no improvement in service. This price increase was rationalized as allowing for greater streaming content. But then Netflix announces that Starz will not be renewing their contract and thus they’re losing quite a bit of streaming media. But that’s not the end of it, Netflix CEO, Reed Hastings, just sent an email out early Monday morning which I honestly thought was a joke and had to double-check its authenticity. What we all knew as Netflix is now Quickester… Quikster… or however you spell it (actually spelled Qwikster… a marketing fail in itself).

Here’s the glorious email I received early Monday morning. It’s enough to spoil the rest of my week.

Why Qwickester (err I mean Qwikster) is a Bad Idea

First of all, it’s impossible to spell the new name of the service. Can you imagine having a casual conversation with a friend and saying, “Oh yeah I got that movie queued up on Qwikster”.

  1. Loss of Brand Equity – Netflix has gained over a decade’s worth of brand equity. We all know and love the Netflix brand. That brand equity is being flushed down the toilet with Qwikster. Any type of advertising or promotion for Qwikster will not carry the same effectiveness as that of Netflix. The millions of dollars spent on developing the Netflix brand will have to be re-spent to develop the Qwikster brand; shareholders, what do you think of that move?
  2. Inconvenient for the consumer – Netflix CEO has stated that Netflix and Qwikster will operate independent of each other. I know of some people who justified the recent price increase and kept Netflix for DVD and Streaming. With this new step, those who chose to stick with Netflix now have a stronger reason to drop them. Imagine this scenario… you want to watch a movie so you log into Netflix to get it on streaming… It’s not available due to the lack of streaming content. So now you have to log into Qwikster and add it to your queue there. Oh and your recommended movies? They’ll be different between both websites. So how personalized will Netflix be now?
Netflix CEO Reed Hastings: A negative of the renaming and separation is that the and websites will not be integrated. So if you subscribe to both services, and if you need to change your credit card or email address, you would need to do it in two places. Similarly, if you rate or review a movie on Qwikster, it doesn’t show up on Netflix, and vice-versa.

The Effect on the Stock Price

I’m so glad that I don’t own any Netflix stock. Since the announcement of the price increase, Netflix (NFLX) has lost almost half its value. With this announcement, I can certainly say that Netflix’s near-term performance is at jeopardy. If you do own any Netflix stock… sale sale sale. Netflix has shown that it’s being directed and managed by a team that is disconnected with its consumers.

Why am I still a Netflix customer?

Yes I had full intent to cancel but let my subscription accidentally roll into September. With Netflix policy of no partial-refunds, I was charged the new higher price automatically. I take responsibility for this and don’t blame Netflix for it. They gave the announcement ahead of time and they’ve had their refund policy the same for awhile now. However I will definitely be canceling this month and have reminders all over the place.

I bet this happened to many other folks as well. So Netflix, you might not want to conclude your revised customer numbers just yet. There’s another wave of cancellations coming this month as people like me are kicking themselves for losing track of time and letting their subscriptions roll into September.

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