This morning, Netflix CEO Reed Hastings announced on the company’s blog that it would abandon plans to divide the company into two – with streaming and DVD rentals both remaining at Netflix.
The company’s decision to hold off on launching Qwikster is in response to consumer dissatisfaction expressed on the internet and points to the power social media has in enabling people to express their opinions and in allowing companies to respond to the needs and wants of the market.
The move is one in a long line of changes implemented by the company.
The first was Netflix’ price hike – from $10 to $16 a month – for both streaming and DVD rentals. While users expressed anger at the increase in prices, two months later, Netflix exacerbated consumer dissatisfaction and announced a new plan to divide the company into two – with streaming of videos remaining at Netflix and DVD rentals moving to a new company, Qwikster.
The new company would have required consumers to use two separate websites and maintain two different accounts, a change that many were dissatisfied with. Consumer outrage at the plan from Qwikster was evident on Twitter, Facebook, and comments on Netflix’s blog that announced the changes.
Consumers’ comments ranged from expression of dissatisfaction to threats of cancelling their subscriptions. “I just got your email, and, as a long-time customer, quite frankly found it to be offensive. And perhaps a devastating miscalculation for your business,” one user, David Isaacson, commented – to 4764 likes – on Netflix’s blog.
Netflix users’ outrage was evidently the driving force behind the decision to maintain one website, and it points to the growing power of social media. With comments and Tweets, consumers are able to not only relate their desires and dislikes to companies, but also to hold them accountable.
The launch of Qwikster would have come not to eager anticipation but rather a barrage of criticism. Instead of launching an unsuccessful and unwanted service, the company was instead able to respond to consumer criticism and renege on its plans for a likely disastrous venture.
Photo Credit: adria.richards