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My e-mail from Reed: Netflix "apologizes," pulls a Qwikster

Reed Hastings sent me an e-mail Sunday night -- did you get one too? -- that began:

Subject: An Explanation and some reflections

Dear Jim,

I messed up. I owe you an explanation.

It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming and the price changes. That was certainly not our intent, and I offer my sincere apology. Let me explain what we are doing....

Oh, Reed. You don't owe me an explanation -- or any reflections -- and you know it. You're just doing exactly what you said you were doing when you made that announcement in July that you now say was lacking in "respect and humility." Only now you're doing it in a way that reeks of condescension and disingenuousness. Not an improvement.

A couple months back, I noted here that Netflix had already announced on its tech blog that it was going to discontinue mobile app support for managing DVD/Blu-ray queues. When you announced, at the same time as your price hikes, that the DVD/Blu-ray-by-mail business would be reconstituted as a separate division, it didn't take the sharpest taco on the beach to figure out what your next step would be, and now you've announced it. Netflix wants out of that business that relies on the nearly bankrupt Postal Service. OK, we get it.

In some ways it makes sense, since analog delivery of digital information is illogical. (Does the Columbia Record & Tape Club still exist? Apparently not, but I found the Columbia House DVD Club, whose slogan is, hilariously: "Pay For the DVDs You Want, Without The Streaming You Don't." Of course, we've all seen "A Serious Man," so we know how they operate. They just got hit with a class action suit in August.)

columbiahouse.jpg But here's what you still don't seem to understand: You don't announce price hikes now at the same time you promise vague improvements in service at some point in the indefinite future. You don't trumpet the formation of a new company/division without showing -- right now -- how that new label improves on what you've been offering in the past. In other words, don't expect money for nothing. Or, worse, less.

This isn't the way to go about it:

Qwikster will be the same website and DVD service that everyone is used to. It is just a new name, and DVD members will go to qwikster.com to access their DVD queues and choose movies. One improvement we will make at launch is to add a video games upgrade option, similar to our upgrade option for Blu-ray, for those who want to rent Wii, PS3 and Xbox 360 games. Members have been asking for video games for many years, but now that DVD by mail has its own team, we are finally getting it done. Other improvements will follow. A negative of the renaming and separation is that the Qwikster.com and Netflix.com websites will not be integrated.

There are no pricing changes (we're done with that!). If you subscribe to both services you will have two entries on your credit card statement, one for Qwikster and one for Netflix. The total will be the same as your current charges. We will let you know in a few weeks when the Qwikster.com website is up and ready.

For me the Netflix red envelope has always been a source of joy. The new envelope is still that lovely red, but now it will have a Qwikster logo. I know that logo will grow on me over time, but still, it is hard. I imagine it will be similar for many of you.

So, you don't even like the new logo. Thanks for sharing that. "It is just a new name." Oh, that's something to get enthusiastic about. And there will be video games. A whole new market for you... and nothing for existing movie customers. (This is like saying: "Hey combination Pizza Hut and Taco Bell fans -- we'll now be selling shampoo, too!")

OK, maybe this isn't exactly New Coke (yet), but when it comes to tone-deaf CEOs, Reed, you're proving yourself the Real Thing™.

(Oh, and Gizmodo reports that the Qwickster Twitter name already belongs to "The Foulmouthed Pothead.")

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