What’s interesting about Netflix‘s announcement this week that it has killed the Qwikster brand before even launching it is the fact that the Netflix product is flawed. I am not sure who is drinking the Netflix Kool-Aid, but most people I talk to who have jumped on the Netflix subscription bandwagon confess that their local library has a better selection of movies than Netflix. I struggle (using that term lightly as there are indeed more important pursuits) to find a movie I want to watch through Netflix. When I ask my husband rhetorically why we are subscribing, he and I both concede that it’s a small price to pay — and maybe Netflix will get better. That it will start to strike better distribution deals or come up with original programming – the latter is coming sometime in late 2012 (that’s right, later next year). The fitful public might not be patient enough to wait it out as Amazon, Redbox and others gain market share. Netflix has already reportedly lost $2 billion in market capitalization after it raised its pricing and changed its service structure.
So we divert attention from the quality of this once promising service as we engage in some Schadenfreude, with CEO Reed Hastings admitting that Qwikster was a bad decision. He backtracked, for sure, but at least he did it quickly (qwiksterly?). It took Coca-Cola a lot longer to spill New Coke down the drain. I applaud Hastings for admitting defeat and trying to win back the public including some angry shareholders and couch potatoes.
He sort of spoke to the press yesterday when he formally announced:
“There is a difference between moving quickly, which Netflix has done very well for years, and moving too fast, which is what we did in this case.”
In the same corporate announcement, a Netflix spokesperson added: “We underestimated the appeal of the single web site and a single service. We greatly underestimated it.”
So there you have it. A once super-strong brand loses its mojo at the same time it increases prices and confuses the public by creating a separate but similar brand as if Netflix the brand wasn’t strong enough for the shrinking population of DVD renters who might relate more to Qwikster.
As for the public apology and mea culpa, Hastings should have spoken to the press yesterday. The corporate line was “he was not available for interviews.” In PR, we know what this line means. Of course he was available (what else should he be doing than dealing with this crisis and tamping down further media speculation?). The public likes a good apology and a humble CEO. So why not take some interviews, Hastings? To quote from a movie that is available on Netflix and whose title might best reflect Netflix’s future, “tomorrow is another day.”