What's Qwikster, you ask?
Netflix, faced with falling subscriber numbers and a seething horde of angry users (to say nothing of the seething investors on Wall Street), will split its video rental service into two separate arms, Netflix CEO Reed Hastings announced over the weekend. The streaming video arm will retain the name Netflix, Hastings said, while the rental service will get the name Qwikster.
Hastings also took the time to apologize for having "messed up. I owe everyone an explanation," Hastings wrote in a blog post on Sunday. "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."
So! To recap, Hastings is sorry for rising prices on you, and for dividing DVD rental and streaming video services, and he and the rest of the Netflix will now further compound your emotional injuries by giving the physical rental services a separate (and somewhat confusing) new name. Unsurprisingly, the move drew its fair share of jeers on Monday, none more barbed than those of Alexandra Petri, a Washington Post columnist.
In her column, Petri rehashed the original Hastings post, and then suggested that Hastings should have written the following:
I understand how apologies work. An apology is what you write when you feel that you have done nothing wrong, and you want to tell people that you are about to add insult to injury by renaming your DVD-in-the-mail service Qwikster. We selected this name in case you were worried that Netflix was not actively trying to scare your business away. Qwikster is short for Quick, I Want To Come Up With A Stupid Name No One Will Be Able To Spell Or Remember. We chose it after long deliberations where we weeded out any name that didn’t sound like a dairyless creamer, illegal download service from the late ’90s or an awful virus that destroys your laptop’s memory.
Earlier this month, Netflix dropped its membership forecast for the year ahead, confirming some fears that the price hikes would scare away customers. Specifically, Netflix lowered its quarterly estimate of streaming customers to 21.8 million, down from 22 million, and dropped its estimate of DVD customers from 15 million to 14.2 million. Not dire numbers, obviously, but not good numbers either, especially for a company with such a firm grip on the market.
By splitting the company into Qwikster and Netflix divisions, Hastings clearly hopes to assuage concerns among users, and chart a course forward for the video-rental giant. Will it work, all jokes about "dairyless creamers" aside? Sure, says Will Greenwald of PC Mag, who notes that "at this point," the backlash against Netflix is "not warranted."
"It's a case of a service growing, expanding, and changing to fit both technology and licensing opportunities," Greenwald writes. This could mean the eventual disappearance of DVDs-by-mail from Netflix, leaving users with only Redbox, Blockbuster (as long as it stays around), conventional video-on-demand, Hulu Plus, iTunes, and Amazon for newer releases. Netflix/Qwikster isn't yet leaving physical media users in the lurch, and even if it does completely leave the market, there will still be options." Agree? Disagree? Drop us a line in the comments section.
For more tech news, sign up for the weekly BizTech newsletter, which ships every Wednesday.