This step may not come as a surprise if we simply understand the various goof-ups that hurt the company & more importantly hurt its subscribers. A few months ago, Netflix announced that it would be separating Only costs of its DVD-by-mail and its online-streaming plans, creating an effective price hike for those who had already taken advantage of the company’s bargain-bundle-subscription. Then, again a few weeks ago, CEO Reed Hastings emailed subscribers to announce another change: Netflix would be separating its DVD and streaming services entirely, killing the formerly named brand “Qwikster” and assigning it a separate website. And in first week of October 2011, Netflix announced a modification to the change: the customers had spoken & Netflix had listened; Qwikster was a failed idea; the plan to divide services will be scrapped.
The price-hike seemed fair at that time (rising costs of shipping the DVDs). Further, majority of Netflix’s new customers were signing up for streaming-only plans. And with streaming an increasingly powerful force from Hulu and Amazon, it became very clear that the real future of the movie business is in the Cloud & not in the optical disk.
However, this erratically planned & badly executed decision let customers / subscribers so much in disdain that Netflix started losing subscribers by hoards. Though Netflix had braced itself for a loss of 6,00,000 subscribers, the reality turned out to be pretty ugly as the figure touched 8,00,000! This is real dampener on Netflix’s global expansion plan. Though Netflix is going ahead with UK & Ireland, further global roll-out is paused citing reasons like “need to take a few quarters to get our subscriber base back to the appropriate size.”
With Netflix out of the game for the time being, will BigFlix gather more momentum in India? You be the judge.
Author: Alap Naik Desai