The Year of Netflix

This should have been the Year of Netflix, and I guess it was, but not in the way I expected.  The company seemed to be growing beyond expectations until a sloppy price increase earlier this year damaged the company's image and eventually its stock (a 75 percent drop). The decision in July to divide the DVD and online streaming business, each with their own cost structure and websites, made a very simple and inexpensive online option both complex and costly.  By October, Netflix was bleeding members and the company responded in an email to customers: 

It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs.

This means no change: one website, one account, one password…in other words, no Qwikster.

While the July price change was necessary, we are now done with price changes.

Now Nexflix's CEO, Reed Hastings, will lose $1.5 million from his compensation in 2012 after his stock options were cut in half.  Considering he caused the company to lose 800,000 subscribers, he is lucky to have a job.  A company that seemed to be doing everything right in terms of customer service slammed into a wall that it created.  The cable companies, Apple, and others expanding in the online TV/movie business now have a second wind and they will use it to grab even more market share. As with the missteps of Facebook on member security, the new economy is still being run by humans and their accompanying pride.  Customers want choices and are willing to walk when they are taken for granted.