What follows is a letter I sent to Netflix CEO Reed Hastings in response to his blog post of Sunday, September 18th, 2011 entitled An Explanation and Some Reflections
Please forward this to Reed. Since it took him so long to write me a personal letter on this, I didn't have time to do the same right away, but I think it will be helpful to a company which up until now, I thought was one of the greatest around. I used to swear by Netflix, and used to be zealously loyal to it and now I am considering canceling. I wonder if Netflix actually talks to its subscribers and makes plans based on the real world, or have your decision makers become completely disconnected and blinded by a success which can easily fade.
Please forward this to Reed. Since it took him so long to write me a personal letter on this, I didn't have time to do the same right away, but I think it will be helpful to a company which up until now, I thought was one of the greatest around. I used to swear by Netflix, and used to be zealously loyal to it and now I am considering canceling. I wonder if Netflix actually talks to its subscribers and makes plans based on the real world, or have your decision makers become completely disconnected and blinded by a success which can easily fade.
Below are the comments I sent to a friend of mine regarding Reed's letter and the situation.
Yeah... As far as Netflix, I feel I should have gotten a letter from the CEO within a day of the price increase announcement in the newswires. As far as I recall, this is the first official email I have received from them regarding this price increase period. All other info I have received from the news. I never saw a customized e-mail saying "here is what you were paying per month and here is what you are going to pay" and so don't actually know what my new price will be for my 3 DVD out at a time + Streaming plan.
To me, the actions described in this e-mail are making things far, far worse. I might actually look to go short on the stock, but it may be too late for that at least in the near term as it has already taken major hits. The only thing good I see is the addition of games. Separating the sites is completely IDIOTIC. The main asset to me that Netflix has of mine is my ratings of every movie since I signed up with them in 2001. There was also always the convenience of being able to look up any movie that exists and maybe watch it instantly, if not, no big deal, add it to the DVD queue. In fact, I was recently angered when they stopped showing non-instant movies on the iPhone app. I always used the Netflix app as a one stop to get quick info on ANY movie. As someone who is relatively financially affluent and time poor, I considered the elasticity of my demand for Netflix to have been very low. I am also one of Netflix's most profitable subs as I often wind up keeping a DVD for months at a time. So I felt a little annoyed on an intellectual level about the price increase, but I knew that I would swallow it in large part because of these conveniences and my stored ratings. I also didn't mind so much because if it means me getting a bigger selection of top tier movies instantly, I am willing to pay. If they think I am going to go to two separate websites or apps to rate every movie I see, they are insane. They should take great heed to this as this is the first time that I, a decade-long subscriber and early adopter am seriously considering abandoning the service (both of them). My decisions have also been a really good barometer for the overall consumer market because in general I am anti-materialistic and advertising-insensitive. This is not to mention all the money they are going to waste rebranding the sites, advertising for two separate sites, loss of brand recognition, additional charges paid to credit card companies for multiple transactions for the same customer, etc. It looks like they are going to WASTE the entire price increase on this fool's errand.
Eric
Eric
