Customer Backlash Forces Netflix to Drop ‘Qwikster’ DVD Plan

When Netflix announced its plan last month to spin off its DVD rental business into a an entirely seperate subsidiary called Qwikster, customers were not pleased. The company’s recent subscription price hike had already irked customers, causing about 1 million of them to quit the service.

Having heard those complaints loud and clear, the company has decided to axe Qwikster altogether and keep their DVD rental service as part of the Netflix brand. This summer’s price hike will stay in place, but the company hopes to stop the slow exodous of customers by capitulating on the Qwikster issue, which had proved wildly unpopular.

Netflix had a pretty rough September. The day their controversial price increase took effect, the company lost a major content contract with Starz Entertainment, putting a valuable collection of streaming content at risk of being pulled from the service. Customers were still reeling from the price hike when Hastings announced the Qwikster plan in mid-September. It did not go over well.

“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,” Netflix CEO Reed Hastings wrote in a blog post. “This means no change: one website, one account, one password… in other words, no Qwikster.”

The prospect of having two separate Websites with different login credentials and movie queues did not sit well with many customers, who have grown accustomed to managing everything from a single account with a common interface. The backlash was quite loud online, and it apparently wasn’t just chatter and empty threats. Evidently, the company has been seeing enough canceled subscriptions (some of which were expected) to warrant a change of plans.

Even as the company gives in to customers’ wishes and backs off of an unpopular decision, many commenters on the Netflix company blog remain disastified, many of them demanding that Hastings step down as CEO and criticizing the company’s recent series of PR gaffes. Some people remain hard to please, but Netflix is hoping that this latest move will begin to turn things around.

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