CEO Reed Hastings has had a public change of heart. Coming on the heels of a rather controversial price increase, Netflix is spinning off the DVD-by-mail division into a separate entity called “Qwickster” and adding video game options.
From the Netflix blog:
It is clear from the feedback over the past two months that many members felt we lacked respect and humility in the way we announced the separation of DVD and streaming, and the price changes. That was certainly not our intent, and I offer my sincere apology. I’ll try to explain how this happened.
For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.
** Editorial Correction – the spelling of Netflix’s new company is Qwikster (no “c”). We apologize for the mispelling.