Dear
nora,
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.
For the past five years, my
greatest fear at Netflix has been that we wouldn’t make the leap from success in
DVDs to success in streaming. Most companies that are great at something – like
AOL dialup or Borders bookstores – do not become great at new things people want
(streaming for us). So we moved quickly into streaming, but I should have
personally given you a full explanation of why we are splitting the services and
thereby increasing prices. It wouldn’t have changed the price increase, but it
would have been the right thing to do.
So here is what we are doing and
why.
Many members love our DVD service, as I do, because nearly every
movie ever made is published on DVD. DVD is a great option for those who want
the huge and comprehensive selection of movies.
I also love our streaming
service because it is integrated into my TV, and I can watch anytime I want. The
benefits of our streaming service are really quite different from the benefits
of DVD by mail. We need to focus on rapid improvement as streaming technology
and the market evolves, without maintaining compatibility with our DVD by mail
service.
So we realized that streaming and DVD by mail are really
becoming two different businesses, with very different cost structures, that
need to be marketed differently, and we need to let each grow and operate
independently.
It’s hard to write this after over 10 years of mailing
DVDs with pride, but we think it is necessary: In a few weeks, we will rename
our DVD by mail service to “Qwikster”. We chose the name Qwikster because it
refers to quick delivery. We will keep the name “Netflix” for
streaming.
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.
I want to acknowledge
and thank you for sticking with us, and to apologize again to those members,
both current and former, who felt we treated them thoughtlessly.
Both the
Qwikster and Netflix teams will work hard to regain your trust. We know it will
not be overnight. Actions speak louder than words. But words help people to
understand actions.
Respectfully yours,
-Reed Hastings, Co-Founder
and CEO, Netflix
p.s. I have a slightly longer explanation along with a
video posted on our
blog, where you can also post
comments.
