Faced with a dramatic backlash against a recent 60 percent price increase amid plans to separate its DVD rental and streaming services, Netflix on Sunday announced a rebranding of its disc rental service that will include the option to upgrade to video game rentals.
Netflix’s legacy DVD delivery operation will know be known as Qwikster, “because it refers to quick delivery,” said Netflix co-founder and CEO Reed Hastings in a blog post that profusely apologizes for poorly handling earlier communication of the company’s dramatic changes.
“I messed up. I owe everyone an explanation,” Hastings 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. That was certainly not our intent, and I offer my sincere apology.”
Now attempting to lay it all on the table, Hastings says Netflix acted quickly out of a desire to avoid becoming the next Borders or AOL dialup — media companies that burned brightly until there was nothing left.
“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,” he said. “When Netflix is evolving rapidly, however, I need to be extra-communicative. This is the key thing I got wrong.”
Netflix says Qwikster’s disc queues will be managed on a separate website from Netflix, which will be where users manage their streamed movies and TV shows. This means that if you use both Netflix and Qwikster you will have to rate movies twice and manage your credit card and contact information in two places as well.
The video game upgrade, the company said, will work much like the current Blu-ray option does. It will include Wii, PlayStation 3 and Xbox 360 titles. “Members have been asking for video games for many years, and now that DVD by mail has its own team, we are finally getting it done,” Hastings said.
Will this be enough to lure back any of the million subscribers Netflix lost in its summer of rapid reinvention?