Netflix CEO Issues Apology, Renames DVD Business | Adweek Netflix CEO Issues Apology, Renames DVD Business | Adweek
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Netflix DVD Service Renamed Qwikster, With Same Pricing

CEO Reed Hastings admits 'I messed up'

Photo by Justin Sullivan/Getty Images

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After losing a million customers and a major portion of its stock value, Netflix has decided that it’s time to go in a new direction—but isn’t backtracking on the price hike that caused the fallout in the first place.

In a post on the company’s official blog, Netflix CEO Reed Hastings attempted to regain some goodwill by issuing an apology for his handling of the fee increase. “I messed up. I owe everyone an explanation,” he wrote. “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. . . . In hindsight, I slid into arrogance based upon past success.”

So how is he planning to remedy the situation? Not by reducing fees back to pre-hike levels, but by splitting Netflix into two separate entities. “It’s hard for me to write this after over 10 years of mailing DVDs with pride,” he wrote, “but we think it is necessary and best: In a few weeks, we will rename our DVD by mail service to ‘Qwikster.’”

The renamed DVD service will now also offer video games as part of an “upgrade option” (read: added fee). The Qwikster and Netflix sites won’t be integrated (“Netflix” will now refer solely to the company’s video streaming service), and users will have to sign up for two separate subscriptions. “Our view is with this split of the businesses, we will be better at streaming, and we will be better at DVD by mail,” Hastings wrote.

Of course, none of this signals a return to the old pricing plan. Qwikster will cost $7.99 a month for one DVD, just like the revamped Netflix DVD plan, and streaming will still cost an additional $7.99 a month. So it’s pretty much the same as the hated new Netflix, just more complicated. And with video games.

Meanwhile, in the midst of thinking up a way to appear humbled while still charging customers $15.98 a month, it appears that Hastings forgot to grab the @Qwikster Twitter account. As it turns out, the handle is already being used—by a man with a profile picture of a pot-smoking Elmo, whose recent tweets include musings such as “Bored as shyt wanna blaze but at the same time I don't ugh fuck it where's the bowl at spark me up lls” and “Don't bother telling me who my ex is now dating ! Cuzz now I feel bad for the bitch that has my sloppy seconds :)”

Several Twitter users have already advised the current @Qwikster owner to demand payment for handing over the handle, while others just tweeted stoner jokes at his account, quickly making Hastings’ one-day-old company synonymous with pot. Here’s to new beginnings, guys.