Netflix recently split their services into DVD shipping and internet streaming, while increasing prices.  Back in July this change was announced and today Reed Hastings has issued what he describes as an apology.  Only, it isn’t. 

The price increase and service reduction announced back in July1 was met with public outcry.  Reed Hastings and Netflix responded with interviews and press releases, but never a change in their policy.  In one of these interviews Hastings made a comment that the price increase was “just a latte,” which struck the wrong chord with some.  Yes, it shows he’s out of touch with his customer base, but that’s hardly breaking news on the heels of a 60% price hike. 

To make matters more interesting, on September 1, 2011 Netflix lost one of the biggest draws to it’s streaming service – the deal it had cut with Sony and the premium cable channel Starz.  So, not only does the Netflix price increase promise lower service and higher prices, but they’re also going to be offering 100,000 fewer titles.  And, these aren’t just old titles – Starz was contributing recently released movies and lots of Disney titles.

Now Hastings publishes a post entitled, “An Explanation and Some Reflections.”  In a nutshell, he’s saying:

1. People are upset about the price increase and service reduction.
2. I’m sorry I didn’t communicate about the price increase and service reduction more.  I wouldn’t have changed anything, you’d still be charged more and getting less, I just shouldn’t have been so uncommunicative about it.
3. We’re splitting Netflix into a new DVD-by-mail service called Qwikster and keeping internet-streaming on Netflix.  Don’t worry, you’ll still get red envelopes.  You’ll now need to manage separate queues and websites that won’t be integrated.

Hastings, let me respond to help you put things in perspective.  And, I have a feeling I speak for some of the 12,000 people who responded to your morning’s post when I say this:

1. If you’re not really going to apologize for something people are upset about, don’t bother apologizing for things they aren’t upset about. I’m not upset about the amount of communication.  Believe me, the problem is not that I’m just not getting enough Hastings with my Netflix.  In fact, I actually enjoy a product more when I’m not busy thinking about the CEO of the company.
2. What really irks me about Hastings is that he has continually tried to spin price increases and service reductions as service improvements.  This really is offensive to me.
3. This new development of Qwikster is making things worse.  Now, not only am I going to pay more and get less (especially with Starz leaving), but you’re doubling the amount of work I have by making me manage two queues.

Why isn’t anyone at Netflix paying attention?  Your customers are not alienated because Reed Hastings isn’t talking enough.  Your customers are alientated becuase prices and hassle are going up while services and selection are going down.

1. Which was scheduled to be implemented on September 1 [↩]