Just three weeks ago, Netflix CEO Reed Hastings admitted he “messed up” by failing to adequately explain the changes to the DVD-streaming company’s membership plans and pricing structures. Hastings apologized at the same time he announced that the company would be split in two, with the original DVD-by-mail business renamed Qwikster, and the streaming operation keeping the Netflix moniker. With today’s big announcement, it was time to admit that Netflix and Hastings had “messed up” once again.
The latest news is that there will be no Qwikster. Less than a month after the name was circulated around the world, Netflix’s Hastings now says that, err, um, let’s pretend that whole Qwikster announcement never happened. Hastings posted:
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.
This means no change: one website, one account, one password… in other words, no Qwikster.
Go visit qwikster.com right now, and you’ll automatically be redirected to the old Netflix home page. What happened? Simply put, Hastings comes clean that he messed up, mere weeks after the last time he had to tell everyone he’d messed up:
“There is a difference between moving quickly — which Netflix has done very well for years — and moving too fast, which is what we did in this case.”
While it’s news when any CEO (or politician, for that matter) admits making a mistake, it isn’t really news that Netflix has made some questionable moves. The company’s stock price plummeted once its pricing changes took effect, and fell even further after the Qwikster announcement. In July, a share of Netflix was trading in the neighborhood of $300. By late September, the price had dropped to around $100. Subscriber numbers have steadily decreased as well.
No matter how bad reversing a decision announced just weeks ago would make Hastings look, he had to do something. So today, while in the throes of “desperation mode,” as one analyst put it, Hastings said both the DVD and streaming operations would continue on as the same company, on the same website.
More than one analyst used the D word (desperation) to describe Netflix. Here’s a quote at CNN Money:
“Basically, these guys are desperate, and this confirms it,” said Tony Wible, analyst at Janney Capital Markets. “While this move doesn’t solve the company’s long-term issues, in the interim, at least it can try to accelerate some positive catalysts for customers and its stock price.”
All the flip-flopping and dithering certainly makes Netflix seem a bit desperate. But for now at least, it also makes Netflix appear to be a better investment. The company’s stock price soared 7% soon after announcing that there would be no Qwikster after all.